The owner of one of Montana's biggest lumberyards joined builders and economists Thursday in pressing for government reform before housing's sinkhole gets any deeper.
"It's going to get a lot worse unless something dramatically changes in the meantime," said Bill Simkins, owner of Simkins-Hallin Lumber in Bozeman, Mont. He noted that staffing levels at his 60-year-old business are down 30% from a year ago. "This is certainly one of the worse downturns we've seen," he said.
Pointing to traditional engines within the Montana economy, Simkins said the inability to hire new employees, let alone retain employees, has put a dent in the "Main Street economy. Contractors, subs and landscapers who were once active with jobs, particularly in the Big Sky State's ski resort community where Simkins-Hallin does business, have run out of work this year, Simkins said.
Montana lost roughly 23,000 jobs in the construction industry between November 2007 and November 2008, according to Bernard Markstein, senior economist of the National Association of Home Builders in Washington. During that same period, single-family building permits fell 40%.
And lack of consumer confidence ranging from California to Florida and New York hasn't helped the situation. People who once purchased second or new homes in Big Sky are no longer doing so. In addition, fewer skiers are willing to spend discretionary funds on a vacation in Montana.
"It goes beyond anyone in the housing industry. It affects the people who sell clothing and jewelry," Simkins said. "These people don't have anything to do with the construction or housing industry ... but it shows how the housing downturn is cascading through the whole economy."
Anders Lewendahl, a custom builder in Bozeman for the past 20 years, has no jobs lined up for 2009. A possible 16-unit condo project lies on the horizon, Lewendahl said. While it could create jobs, nothing is guaranteed.
Teleconference participants called on Congress to support a variety of measures to boost the housing market. A coalition of builders, vendors, lumber dealers and associations are supporting an initiative called Fix Housing First. Specifically, the group seeks:
- A 10% tax credit for all qualified home buyers capped at 3.5% of FHA, Freddie Mac or Fannie Mae loan limits (equaling $10,000 to $22,000, depending on geographic market). All primary home purchases through Dec. 31 would be eligible. Repayment would be required only if the home was sold within three years. And the credit would be available at closing, making it easier for buyers to use it as a down payment.
- Qualified home buyers with 30-year fixed-rate mortgages at 2.99% interest on contracts closed until June 30 and 3.99% interest on closings between June 30 and Dec. 31.
- Continued measures to reduce foreclosures and keep people in their homes.
"Housing is central to our economy and is an engine of production that can lead us out of the recession," said Richard Smith, president, RJ and Associates Design Build. "But it is crucial for Congress to enact a major stimulus package to stop the decline in home values, stem the tide of foreclosures, stabilize financial markets and re-ignite consumer demand."
In a related development, the National Lumber and Building Material Dealers Association has released its National Agenda Policy for 2009. It includes an open letter to incoming President Obama and the 111th Congress while calling for reform that could re-start the industry.