Recovering housing market boosts local economy
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The housing market crash affected homes like this one across the entire nation. Now, local lenders and real estate agents are finally seeing positive signs and looking forward to a great spring.
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RONAN — Prior to the recession, the housing market in Western Montana was a powerful economic force in the region.
More than the simply buying and selling property, construction of new buildings and homes, permits, applications and additions built onto existing structures as well as new home-building sites brought a significant amount of money and jobs to the area.
Now, several years after the housing market collapse and recession, many area lenders and real estate agents are seeing positive signs and growth in the industry.
Whether the growth is short-term only or the sign of prosperity in the future appears to be a contested issue, but the fact remains that things are getting better — at least for now.
“We’re looking forward to a pretty good spring,” said Mission Valley Properties owner Trudy Samuelson. “I’ve seen a lot of ups and downs in this market. This is a different ‘down’ than I’ve ever seen before, so what the future holds is pretty speculative. I think in the short term things are going to be pretty good. In the short term.”
Samuelson, with more than 35 years of experience in the industry, said she’s currently busier than she has been in severals years and is seeing a lot more out-of-state buyers looking at the area.
But business wasn’t always booming.
“My phone stopped ringing in October of 2009,” she said. “I can just about name that exactly. That’s when things really slowed down for me.”
Samuelson said about 60 percent of her business disappeared overnight.
“We took money out of savings to keep the office going over a period of years,” she said. “It just dropped off.”
Spring 2012 is when Samuelson’s business picked up a bit, and it has continued to be strong. She believes prices have finally hit rock bottom and, if the home is priced correctly, negotiation over pricing is not nearly as prevalent.
Carolyn Cole has owned and operated Mann Mortgage in Polson for the last 17 years. While Cole saw things taking a turn for the worst in 2009, she said the crisis didn’t hit her business financially until a year later.
“Montana is always a little slower to the punch,” she said. “We come to the party late across the board. When the market decreases and when we see appreciation, we come late.”
For evidence of this, Cole pointed to California, Florida, Nevada and the Rust Belt being hit by decreased values much earlier than Western Montana.
Unlike many realtors in the area, Cole’s business did not see a severe decrease. While the purchasing market fell away the refinancing market stepped in to take its place as homeowners took advantage of historically low rates.
“For a period of time, the refinancing market was 80 percent of my business,” she said.
In recent months, Cole’s business has leveled off a bit to 50 percent refinancing and 50 percent purchasing, but is still far from a normal housing market. In a normal housing market, Cole said only 20 to 30 percent of Mann Mortgage’s business is refinancing.
“I think rates will continue to be exemplary through 2013,” Cole said. “But, when you look at recovery periods when we have recessions, even 30 years ago, the recovery periods have gotten longer — almost by doubling. Thirty years ago, a recovery period for a recession was six months. This recovery is going to be a full five-year process. That’s what’s frightening about this; we literally cannot let this happen again. The next recovery period will be seven to ten years.”
Polson’s Community Bank Branch Manager Brenda Dennis said that in the last three to four months, she had seen more construction applications and purchases than in the last year and half.
“If you can call that the real estate market coming back, then that could be it,” she said. “The outlook, to me is hopeful. The fact that people are building homes is great for local contractors who really had a rough take the last couple of years.”
Dennis referenced many local contractors and laborers being forced to seek employment in North Dakota as a result of the economic downturn.
“(The recession) has been tough on builders because of building costs,” she said. “Generally speaking, it’s been more expensive to build a home than to buy one because of the housing costs.”
Even so, Dennis said she is hopeful for the future and is hearing a lot of good things about the area’s economy coming back.
