Housing prices in Montana continue to rise, but how affordable housing looks depends a lot on where you stand. Economists from the University of Montana are focusing on affordable housing in their annual series of economic outlook seminars. The first was in Helena Tuesday, nine more are scheduled across the state between now and mid-March.
Since the 2008 national housing market bust, Montana has seen, annually, "4.1-percent growth in housing prices per year statewide," says Patrick Barkey, director of UM’s Bureau of Business and Economic Research.
He says that’s not as fast as annual housing price growth before the recession, and that Montana prices are growing at about equal to the national rate.
"In terms of growth, we’re right there with the U.S. average, we’re not there with California. But when you average the whole U.S., we’re at least as bad, if not worse than other parts."
There is, of course, tremendous variation in housing prices and how fast they’re growing across Montana.
"The growth in Bozeman's really on par with what’s happening in Seattle, or Portland, for that matter."
The median home price in Gallatin County has risen by about $106,000 since 2012. And while Gallatin’s median price is substantially less than Portland, and especially Seattle, it’s still the highest in Montana, at more than $319,000.
But viewed through another lens, houses in Gallatin County can actually look more affordable than other parts of the state. Barkey offered a map of Montana counties showing the ratio of median home price to median household income.
"It’s getting worse. You can see communities like Missoula, five-and-a-half. So What’s that mean? It means a house price is five-and-a-half times your income."
In Gallatin County, the ratio is 4.8. But, in general statewide, Barkey says about the ratio of home price to income, "That’s a problem that’s getting worse. It’s different around the state, you can see that it’s worse in the West than it is in the East."
Still, the high prices in Gallatin County and on the West Coast have businesses in lower price areas, like Helena, seeing an opportunity to attract companies that offer good paying high tech jobs. Helena has seen home prices rise by 16 percent since 2012, but they’re still lower than Missoula or Gallatin counties.
David Thompson, a vice president at the financial services company SoFi in Helena says he’ll hear employees sometimes complain about trying to find a house locally, but then, "We were looking at apartments in San Francisco when we were down last week at a conference. And when people started saying, 'Oh yeah, I just got a 1,000-square-foot apartment for $7,000 a month,' my guys are like, 'Oh, nevermind. I can find an apartment.'"
Barkey says housing prices are getting so high on the West Coast that they’re starting to be a check on economic growth, as people’s ability to move to where jobs are, even high paying jobs, is being constrained by their inability to afford housing.
Again, that could be good news for Montana, where even the highest housing prices are still lower than in West Coast high-tech hubs. Barkey says Montana has seen substantial growth in both the number of high-tech jobs here, and in wages -- high-tech industry wages have tripled in Gallatin County since 2005.
"So if you look at the overall economy, and you look at the growth of these high-tech industries, there's quite a bit faster growth happening in high tech. And this is pretty important."
But, looming over all of the economic outlooks Barkey and his team of economists are presenting across the state, is fear of a recession. Barkey and his team pointed to indicators that could foreshadow a recession, as well as those that make one seem less likely. But they made the point more than once in their outlook seminar that one thing economic forecasts are admittedly bad at is forecasting exactly when a recession is likely to hit.