Housing sales slowed in most of the state and then got a reprieve from the federal government’s first time home buyers tax credit. The expansion of the credit to move-up buyers should help markets once the spring time buying season rolls around. However, Montana is not out of the woods in relationship to economic hard times.
In Great Falls a growing population driven by the energy business should produce more home buyers. But current weakness in the energy markets is pulling at the local economy as natural gas companies idle rigs and make job cuts. A trend of climbing unemployment is hurting as workers flee for jobs elsewhere. Great Falls should see home sales improve during 2010 on forecast average housing deflation at a modest 3.6%.
New home building starts are down in Missoula, shaken by the national financial crisis and tighter money markets. Missoula had seen 20 years of growth before the economy slowed with housing prices climbing nearly 15 years. Facing economic uncertainty, home builders are holding back from starting new projects. Missoula home prices are forecast to deflate 3.1% for the year.
Outside of major urban movements and Wall Street hedge funds, Montana’s banking industry is regionally supported by local businesses and governments. The trends have acted to protect the economy from much of the economic turmoil elsewhere with creative alternative mortgages that have been the cause of millions of foreclosures.
Despite the practices, however, in Billings home sales have been down for the year along with prices. The protracted slow down ebbed in the spring when the tax credit took effect and should improve through most of the year as move-up buyers take advantage of the federal program.
Keenly aware of possible pitfalls, high end buyers in Billings have vanished from the marketplace to wait out the downturn. The slower pace of sales will have an impact on the market and home prices in Billings are forecast to decline an average of 4.2% in 2010.
Sales have also been off in Bozeman, one of the nation’s few small hubs for home businesses with a reputation for being a classy community with all sorts of amenities. Bozeman will push through any sort of economic downturn, despite sluggish home sales and is projected to see a long term cycle of growth with higher housing values over time after sustaining average declines in home prices of 2.3% in 2010.
A drop in home sales also materialized in Livingston, but was aided by the tax credit. Slowdowns in Montana housing markets happen every winter so it’s a fairly normal occurrence, but locals are wondering just how long and how severe this one will be. Housing Predictor forecasts average deflation of 2.5% for the year.