Community News

The vastness and diversity of Montana’s landscape is one quality that makes it such a special and unique place to live.  And though often we feel the slight tinge of competition to grow the job and housing markets in our own geographical area, the stability of our state’s economy as a whole is what brings people to Montana and retains those of us who were born and/or raised here.

I recently had the opportunity to attend the seventh annual Midyear Update to the Economic Outlook, presented by Paul Polzin and Patrick Barkey from the University of Montana Bureau of Business and Economic Research. The seminar provided attendees with up-to-date data on current conditions statewide as well as projections for the future, including the impact of the current energy boom that is revitalizing the eastern part of our state and beyond. The presentation was geared toward Gallatin County statistics, but a wider scope was also offered.
 
On the national scale, the highlights reported that consumer spending was weaker than hoped for, the European recession is affecting the global economy, western states are faring better than before, inflation is a non-issue, and housing is healing. As for Montana, the pros and cons were laid out. On an encouraging note, income growth is positive, the job market appears to be improving, housing prices are beginning to correct themselves, and energy investment is strong.  The downside reflected the extremely dry weather conditions, the lack of a successful retail sector, and concerns about the global economy affecting the prices of energy and commodities. 
 
There seems to be sufficient evidence to support the fact that the effect of the energy boom, which we hear about daily, is genuine. In the first half of 2012, 225 Montana oil well permits were issued which is nearly equal to the total amount (232) for all of 2011. Furthermore, the percent change in personal income has increased substantially, with the highest figures represented in the easternmost counties. Some counties reported over 8.1% change from 2009-2010 which correlates to the timing of the most recent energy surge. In Gallatin County, actual (nonfarm) earnings increased by 1.6% in 2010 over the previous year, 3.1% in 2011, and are projected to increase by 3.4% in 2012.  Unemployment is always a key gauge of a region’s health. Gallatin County reported a 5.6% unemployment rate in June 2012, while Yellowstone County (Billings) had 4.9%, and some of the eastern border counties were as low as 2.2% (Fallon) and 2.7% (Wibaux) according to the Montana Department of Labor and Industry website. So, though the most direct impact of the gas and oil industry is felt along the North Dakota border, the reverberation can be felt throughout the state in the form of complementary industries.
 
To bring the topic back around to real estate, the trend is for increased sales of both homes and lots. Sales of single-family homes increased in seven of the eight major markets as reported for the first six months of this year. Billings experienced the highest increase in the number of actual single-family sales (895 in 2012 versus 756 in 2011 for 18% growth), yet Helena and Missoula saw larger percentage gains with both markets increasing 22% year over year. The Northwest Montana Association of REALTORS® (Flathead region) is the only market down from last year. Our local market has the highest average sales price of $281,331 and the median price of $223,950. The most recent statistics for our immediate area indicate that year-to-date (through July 31st) single-family sales have increased 14% over last year, condos/townhomes have grown 12%, and vacant land has jumped 67%.
 
All of these positive factors ideally point to a brighter near future for Montanans. With all of the pieces falling into place, why would you live anywhere else?