The Billings housing market ranks as one of the nation’s strongest, with building activity climbing to levels not seen since before the recession of 2008-09.
Billings ranks No. 27 among 350 metropolitan areas analyzed in the National Association of Home Builders/First American Leading Market Index for January. It’s one of 56 metropolitan areas where the housing industry is operating at above normal levels, according to a formula that takes into account building permit activity, housing prices and employment data.
The NAHB’s Leading Market Index measured Billings at 1.10, compared to a national average of 0.86. The index means the nation’s housing industry is running at 86 percent of normal, while Billings is building at a clip that's 10 percent faster than normal.
David Crowe, the NAHB’s chief economist, said smaller markets like Billings are leading the way nationwide.
“Of the 56 markets that are at or above normal levels, 48 of them have populations that are less than 500,000, and many of these local metros are fueled by a strong energy sector, which is producing solid job and economic growth,” Crowe said.
Four of the top 10 metropolitan areas in the NAHB’s study are in Texas. Bismark, N.D., ranked fourth with an overall score of 1.6, and Grand Forks, N.D., ranked sixth with a score of 1.39. Casper, Wyo., ranked third with a score of 1.62.
The study ranks 350 metro areas by compiling their average building permit, price and employment levels for the past two months and dividing each by their annual average over the last period of normal growth. For single-family permits and home prices, 2000-2003 is used as the last normal period, and for employment, 2007 is the base for comparison. Those three components are then averaged to provide an overall score, according to the NAHB.
“What is setting Billings apart from other MSAs is the improvement in building construction,” said Michael Neal, senior economist with the NAHB.
Ty Lantis, co-owner of Image Builders and current president of the Home Builders Association of Billings, welcomed the current pace of activity, and he’s optimistic that the trend will continue through 2014.
Lantis said the Billings housing market didn't get overheated in the years prior to the recession. As a result, Billings avoided a housing bubble that left millions of foreclosures in the wake of the recession.
Lantis said the hottest price range for Billings continues to be homes priced between $285,000 and $400,000.
“We’ve been through a few ups and downs. I’d say we’re at a sustainable level,” said Lantis, whose company built its first home in 2003.
The association’s first Builders and Remodelers Expo last month attracted thousands of people.
“The general public was happy with it and so were the vendors,” Lantis said. “With it being a new event and coming right after the holidays, it was good.”