THE MYTH OF MONTANA'S HOUSING MARKET FRENZY: Has COVID-19 Related Migration Spurred the Recent Rise in Home Prices?

• Author: Polzin, Paul E.
• Position: TRENDING

2020 was a wild ride! We had the COVID-19 pandemic, which upended most of our lives, and now housing prices have gone through the roof. According to the Wall Street Journal, Billings, Coeur d Alene and Spokane are in the top five hottest home markets in the United States. In Montana, there have been concerns about a housing shortage and the inability of working families to find reasonably priced homes, as well as concerns about homelessness. Are these concerns related to COVID-19 migration?

Recent media stories suggest a connection. For example, a Wall Street Journal series paints a scenario where the pandemic has changed the migration patterns of young affluent workers away from crowded urban centers and toward less populated areas. Could this contribute to rising demand for housing here in Montana?

If the year was 2023 or 2024 we could definitely answer this question. Detailed IRS and U.S. Census Bureau data would be available and we could concretely quantify the effects the COVID-19 pandemic had on recent migration. We could also identify certain important demographic characteristics, such as age and income of the migrants. Unfortunately, it will be a while until these figures become available.

In the meantime, there is one data source that provides an up-to-date partial picture of migration. The U.S. Postal Service (USPS) records the requests for changes of address and United States Commercial Real Estate Services (CBRE), a national real estate research firm, publishes data on people moving from one location to another for each Metropolitan Statistical Area (MSA). Montana has three MSAs--Billings, Missoula and Great Falls. Unfortunately, fast growing Bozeman and Kalispell have not yet been designated as an MSA.

The good news is that this data is very timely. The figures include all of 2020, so the impact of COVID-19 will be captured. The bad news is that the data is not very detailed or complete. For instance, we do not know if a request for an address change involves a family or a single individual. Also, USPS redacts data for individual source-destination combinations if there is the possibility that individuals could be identified. This means there are states and/or cities for which there are no data. It appears that redacted data also includes those with 10 or less entries.

In any case, the figures for 2019 and 2020 are comparable and analyzing them allows one to see the changes in migration between those years. Tables 1 and 2...