Through its conservative values Montana avoided much of the real estate bubble, but the difficulties surrounding its housing markets as fallout of the financial crisis persist with less bank lending and troubles in the economy at large.
Home sales in most of Montana took an up swing as a result of the federal home buyers’ tax credit and then nearly evaporated when the incentive expired. The slowdown has been anything but healthy for the state, which typically undergoes a seasonal slowdown because of bitter cold winter months.
In north-west Montana home sales were on the rise as buyers took advantage of near record low mortgage rates and lower home prices. In Great Falls, a laid back agricultural community that accounts for having one of the largest urban populations in the state home values moved slightly lower as national headlines of the housing market crashing scarred off would be buyers.
Housing sales should see an uptick come spring time as the market thaws with lower priced homes experiencing the best chances for appreciation. Great Falls is forecast to see average home prices rise 2.9% in 2011.
Concerned about fallout from the housing bust and over-building, most new home builders are taking a break from starting new projects in Missoula, which had seen a growth boom for 20 years before the market cooled. But home sales are projected to turn more favorable towards the summer months in Missoula on an average forecast boost in home prices of 2.4% for the year.
A more localized banking economy has helped foster a better balanced housing market in most of Montana, including Billings, where home sales also slowed after the tax credit ended.
The pitfalls of the economic incentive became abundant when the credit expired, providing no long lasting impact. Billings, however, should also experience a more abundant market later in the year on forecast average housing inflation of 1.6%.
Despite a seasonal slowdown typical for the market, Bozeman is holding its own as an upward mobile community that fosters to newcomers as a small high-tech hub with plenty of big city extras. Few foreclosures have affected the housing market in Bozeman, which is now forecast to experience appreciation of 2.0% in 2011.