New housing starts decline

Construction of new single-family houses in Flathead County during the first quarter of 2009 were down 50 percent compared to the same period in 2008.

Housing starts for January through March have steadily declined from a high of 276 in 2005 to 50 this year, according to figures provided by the Montana Building Industry Association.

Statewide, housing starts have declined for seven straight quarters and were down by 48 percent for the first quarter in 2009 compared to the same period last year.

The Flathead was about in the middle of the pack when compared to other large Montana counties. First quarter housing starts declined by 65 percent in Missoula County and 63 percent in Gallatin County.

Yellowstone County was closer to the statewide average, down to 49 percent, while Cascade County was down by 39 percent.

Several small counties posted positive figures. Housing starts in Deer Lodge County were up 200 percent with three houses started this quarter compared to one last year.

The negative figures here reflect dismal conditions in the housing industry across the U.S. According to Realty-Trac Inc., a foreclosure listing firm, more than 800,000 homes across the U.S. received at least one foreclosure-related notice in the first quarter this year, compared to 650,000 for the same period last year.

That's a 24 percent increase in homes threatened with foreclosure nationwide. The Obama administration aims to help about 9 million borrowers avoid foreclosure through refinanced mortgages or modified loans and has secured $75 billion in incentives for the plan.

Here in Montana, $2 million has been put into the Welcome Home Program as part of House Bill 645, the legislation that will allocate federal stimulus money.

The bill will provide the Montana Board of Housing authority to partner with private lending institutions to offer short-term bridge loans of $5,000 to qualified first-time home-buyers. The loans would be repaid when home-buyers receive their $8,000 federal tax credit.

The Montana Building Industry Association estimates the Welcome Home Program will save 3,000 first-time buyers more than $12,000 apiece.

While the housing market is severely impacted by the lack of available credit, a large inventory of houses are for sale and prices are dropping.

"If a buyer can manage it, now is a great time to buy — land prices are down, material costs are down, and labor is available," said Shelby Nash-Hunter, president of the Flathead Building Association. "The deals are out there. It is just a matter of looking at this from a long-term perspective."

The Montana Building Industry Association notes that national housing experts believe the housing market will continue to decline into the third quarter this year. A full recovery could take several years, it said.