The word “boom” wasn’t uttered much during Tuesday’s economic outlook seminar, though it was used to characterize parts of one sector.
Though tempered by cautious optimism, the real estate sector in Montana continues to see increases in home prices, which have grown well beyond pre-recession levels.
The biggest gains are centered on the state’s population centers, according to a presentation by University of Montana economist Brandon Bridge.
Billings home prices were up 16.6 percent — which rivaled that of Missoula but was well short of areas like Whitefish, Bozeman and Belgrade.
While those prices bring robust sales, the growth is also outpacing incomes. That, in addition to a limited supply of housing, widens the gap between what most can afford and what’s available.
“Since the end of the bust here, housing affordability has gotten increasingly more challenging and looks to continue to do so,” Bridge said.
His presentation was part of the annual economic outlook seminar, a multi-stop road show led by the University of Montana’s Bureau of Business and Economic Research. Tuesday’s meeting was held at the DoubleTree Hotel in Billings.
Tuesday’s presenters also touched on Montana’s major industry sectors like energy, tourism, health care and forestry.
With the local economy, presenters saw much smaller growth in overall earnings for 2016 alongside the rest of Montana. Wages continued on an erratic, though upward, trend.
“There’s more variability in wage growth in Yellowstone County, but largely either at or exceeding the state average,” said Patrick Barkley, director of the Bureau of Business and Economic Research.
Nearly no earnings growth came to Yellowstone County in 2016, according to Barkley. This came from low performance in the energy, construction and manufacturing, mining and retail industries. This was expected to rebound for 2017 and beyond, he added.
Still, Yellowstone remains above the state average in wages, and overall production grew about 1.4 percent in 2017, according to Big Sky Economic Development Director Steve Arveschoug.
Among the industry sectors, crop producers had perhaps the toughest 2017.
While prices remained relatively stable, it was a 40-percent drop in wheat production that spelled trouble for producers, according to a review by Montana State University professor George Haynes.
The farming downturn was, of course, carried by a substantial drought that hit hardest in northeast Montana and was exacerbated by wildfires. By midsummer, the red drought map covered much of the state.
“I’ve never seen anything like this in the years I’ve worked in Montana agriculture,” Haynes said.
Livestock producers, who were met with stable demand in 2017, could expect the same in 2018, he said. Much attention will be on U.S. beef exports, and whether new deals with countries like China will continue to raise prices.
The job growth outlook for Yellowstone County was predicted to slow a bit to below 1.5 percent, according to Barkley’s presentation. But he suggested that earnings will continue upward.
“We expect that growth to resume,” he said. “In fact we’re seeing 3-percent growth for the next couple years.”