Montana

In Montana they’ve been bucking the trend in the national real estate recession, and the credit crunch has not yet had an impact on its housing markets. But with Montana having one of the highest rates of subprime borrowers at 22% with thousands of mortgages set to be reset in the next few years it will be a matter of time before the fallout of the credit crunch is fully realized.

In terms of home sales, Montana has been riding high as one of the top three states with improving home sales. But most of the state’s markets are already signaling that a slowdown is occurring as Montana prepares for the first decline in home prices in years.

Strong job growth has bolstered its real estate markets along with a growing high-end market that caters to actors and entrepreneurs for vacation homes and ranches. The credit crunch won’t affect most of the wealthy, but it will eventually have a major impact on the rest of Montana’s housing markets, Housing Predictor forecasts.

Great Falls led the state in overall appreciation for a time, but growing concerned about economic uncertainty there are fewer buyers in the marketplace. Great Falls is forecast to have slower home sales by Housing Predictor in 2008 on the way to 4.7% in average deflation. Foreclosures will have an increasing impact on the market through the year.

City	Forecast
Great Falls	− 4.7%
Missoula	− 4.2%
Billings	− 5.2%
Bozeman	− 4.5%
Livingston	− 3.9%

In Missoula, where home prices have increased for about 15 years to just beat out inflation the market experienced double digit appreciation during the real estate boom as an exception to the rule. But as the inventory has grown and sales have slowed, Missoula is in for a re-awakening, forecast to deflate 4.2%.

Consumer confidence among Montana residents is more upbeat than residents of many other states. Job growth has been good in natural gas exploration and construction. But that may be changing sooner than many realize in Montana because the state has never been through a major real estate correction.

Billings has seen its typical slump in home sales approaching the winter months. However, Montana housing markets took an odd turn of events when they did not experience high activity during the summer months, which is also typical of the market since the state is one of the coldest in the U.S.

The summer market slowdown was a sign that a change in the real estate market was coming. Billings is forecast to deflate 5.2% by year's end.

Bozeman may not be affected by foreclosures as much as the rest of the state since many independent business people, artists and entrepreneurs live there. Home sales have been slower for almost a year now and will be fewer in 2008 as prices fall averaging 4.5%.

The average single family home has topped $150,000 in Livingston, a bargain in many places. But the market is slowing and will deflate a forecast 3.9% as increasing foreclosures take their toll on the market.