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Total value of new construction in Billings was about a fourth less in 2011 than in 2010, according to numbers from the City of Billings Building Department. With 354 building permits issued in 2011, compared to 420 in 2010, total value of residential and commercial building permits was $76,670,563 in 2011, compared to $101,040,535 in 2010, continuing a five-year downward trend.

Commercial construction declined $30,696,199 to $28,966,076; single family dwelling declined from $46,354,074 to $38,378,917. Development of multi-family units dropped dramatically, from 35 to 9 permits and from $18,285,885 to $3,904,588.

Billings Realtor Howard Sumner attributes the continued slump in residential construction to the difficulties faced in getting “bridge financing,” which allows them to get from their existing home into a newly constructed home. “Very few buyers of new homes are willing to sell and then rent until their new home is completed,” said Sumner. At the same time, builders are wary of building custom designed home without knowing the buyer is able to complete the transaction, and banks want to know the builder does have a buyer, before financing them.

“It’s the proverbial chicken and egg question,” said Sumner, “which comes first.”

The level of activity in residential construction is “probably the floor level of activity given the size of Billings and Yellowstone County,” said Sumner, adding that “Even at the depth of the 1988 recession there were 75 homes built in Billings.”

Given the current interest rates, Sumner said, “I should have people lined up outside my door to buy. I don’t.”

The ability for clients to obtain financing for single family unit sales has dropped approximately 54 percent since 2007. And, unit sales of existing homes have dropped by 26 percent while the average cost has dropped 23 percent.