Housing market in Billings, Montana, feels the recession

— -- A year ago, the folks in Billings, Mont., thought their housing market was recession-proof.

It had been sheltered from the past two economic recessions. "They just blew right over us," says Twyla Best, president of the Billings Association of Realtors.

But in July, economic woes hit Billings, the largest city in the Big Sky State. "This time, there is no place to hide," says Patrick Barkey, director of the University of Montana Bureau of Business and Economic Research. "The recession is here, and it's not over."

In March, homes sales were down 30.7% from March 2008.

The housing market is pinched because unemployment has risen. In March, the local unemployment rate had risen to 4.7%. But that's not as high as the national rate, which jumped to 8.5%.

Most jobs in Billings are related to health care, retailing, banking and construction. The city is the state's business hub and is home to three oil refineries.

The previous recessions were centered on certain industries, such as energy and high tech, that did not have a significant presence in Billings.

But the broadness of the current recession is affecting all sectors, which has brought it home to Billings.

Home sales in Billings also have slowed because of the stock market crash, Barkey says. Now, many people don't want to take on more debt.

Officials are counting on the steady housing market to return. "If we don't go up high, we don't have far to fall," Best says.

Though there has been a slight increase in home foreclosures and short sales, there haven't been enough to drive down home prices. And first-time home buyers are being drawn in by the tax credit and low mortgage rates.

"We are still lacking some buyer confidence," Best says. "But all of a sudden, the market is quite active, and a lot of people are looking for the right deal."