Traditionally Montana has relied on agriculture as it main source of income revenue. However, over the past decade, oil, tourism, lumber, and breweries have become a major contributing factor to Montana’s economy. And once again the big question for Montana Real Estate is, “Will there be a decline in business and jobs as a result of a decrease in energy and oil costs?” In February 2006 there were 23 oilrigs working in Montana. In 2012 the state saw 17 rigs working. As of the second week of March 2016 there were ZERO rigs working in Montana. What makes these numbers easier to digest are the real estate market numbers over the past few years. Let’s take a look at the Montana’s most populous county as an example of how the overall market is fairing.
Yellowstone County saw closed residential sales increase 7% in the past year, from 237 in February 2015 to 254 in February 2016. The numbers are similar for Billings, the county and the state’s largest city. At the end of February closed sales for Billings real estate were up 7% and inventory up a whopping 11% from the same time a year ago. The inventory for residential active properties for sale in Yellowstone County is even better, up 23% in the past year. Even available rental units have increased 21% in the past year. Rental costs have increased 4% in the past year but they are still below national averages.
The closed residential sales numbers for Yellowstone County are still 10.24% below the highs set back in 2006, but every other economic factor has increased in that time. Population has increased 21,000, approximately 3,400 jobs have been added, and the average wage has gone up $12,000 per year. Interest rates have decreased by nearly 43%, meaning that although homes cost over $50,000 more than they did 10 years ago, it costs about $83 less a month to own the average priced home Unfortunately most housing market predictions forecast interest rates to increase to 4-4.5% by years end. These are still great rates, but the string of historically low rates looks to be coming to a head. So with Montana’s biggest market for real estate doing so well what should we expect for the remainder of the 2016 Housing Market throughout the state?
Generally when a state’s biggest market is strong it’s a good sign. But with any prediction, there are factors such as oil prices and interest rates which could derail forecasts. However, here are a few things that are expected for the state. Attainable housing will see shortages in a majority of Montana’s housing markets. Sales numbers should continue to increase, and median prices are expected to rise in the 6-8% range. Demand in the top price tier ($500K to $1.5 Mil) will continue to increase in demand. Also, realtors are expecting new construction and new subdivisions to come onto the market for the Montana real estate which should further ease supply issues. Areas of concern are increases to interest rates, job growth, energy pricing, and trends in population.
Influencing Factors for the 2016 Montana Real Estate Market
- The state’s average personal income per capita ranks 35th in the country at $40,600.
- Last year Montana’s unemployment rate was 3.9%, lower than the national average of 6%.
- The median home value for the Montana real estate is $186,600. This is a 4.1% increase in the past year and Zillow predicts this number to increase another 2% in the next year.
- Parts of Montana are already dealing with inventory issues. Fortune Magazine predicts that 2016 will see a large mass of first time homebuyers as millenials begin to flood the market. Coupled with low interest rates this will most likely ensure that homes will become less affordable.
- Homes spend an average of 100 days on the market.
- Rental costs on average is $1,162. The national average is $1,382.
- Interest rates are expected to top 4% by years end.
Best Places to Live in Montana
The southwest region of Montana will continue to be a bright spot in the state’s real estate market. The quality of life in the region is rather exceptional with some of the country’s greatest geological attractions. These markets include Bozeman’s Gallatin Valley and Livingston’s Paradise Valley. [ http://www.housingpredictor.com/2016-montana-real-estate/ ]
List of Montana Real Estate Companies:
| Company | Website | Phone | Address | |
|---|---|---|---|---|
| Marcie Hahn-Knoff, PureWest Christie’s International Real Estate | http://www.homeinbozeman.net/ | marcie@homeinbozeman.net | (406) 599-3530 | 1612 W Main St Bozeman, MT 59715 |
| Silver Bow Property Management | http://www.silverbowpm.com/ | management@silverbowpm.com | (406) 723-1219 | 78 E Park St Butte, MT 59701 |
| Gold Rush Management LLC | http://goldrush.management/ | dustin@goldrush.management | (406) 204-1014 | 1419 Helena Ave Helena, MT 59601 |
| Laura Helms | Dahlquist Realtors | http://www.dahlquistrealtors.com/ | lynn@dahlquistrealtors.com | (406) 590-0772 | 500 Country Club Blvd Great Falls, MT 59404 |
| Macek Companies, Inc. | http://www.macekco.com/ | mark@macekco.com | (406) 727-5505 | 104 2nd St S #100 Great Falls, MT 59401 |
| Dustin Young & Company | http://bit.ly/1qGBzcn | dustinyoung@bresnan.net | (406) 216-3130 | 819 8th Ave S Great Falls, MT 59405 |
| Great Falls Realty | http://www.greatfallsrealty.com/ | info@greatfallsrealty.com | (406) 761-3518 | 305 3rd St NW Great Falls, MT 59404 |
| Tannis Kramer - Western Skies Real Estate | http://westernskiesmt.com/ | tannis@westernskiesmt.com | (406) 671-4619 | 960 S 24th St W Ste A1 Billings, MT 59102 |
| Gabriel Salley - ERA American Real Estate | https://www.erarealestate.com | gabriel.salley@erarealestate.com | (406) 698-8816 | 2725 Montana Ave Billings, MT 59101 |
| Parker & Co | http://www.yourbillingshomesource.com/ | deb@debparker.com | (406) 651-4644 | 1655 Shiloh Rd Ste A Billings, MT 59106 |
| Small Dog Realty | http://pammccutcheon.publishpath.com/ | pam@smalldogrealty.com | (406) 220-2013 | 1970 Stadium Dr Ste 1 Bozeman, MT 59715 |
| Delaney & Company, Inc. | http://www.delaneynco.com/ | delaney@delaneynco.com | (406) 586-3132 | 101 East Main St Ste D Bozeman, MT 59715 |
| Bozeman Broker Group Real Estate | http://www.bozemanbrokers.com/ | bert@bozemanbrokers.com | (406) 587-5900 | 1745 S 19th Ave Suite 2 Bozeman, MT 59718 |
| Berkshire Hathaway HomeServices Montana Properties- Bozeman | http://www.bhhsmt.com/ | info@prumt.com | (406) 586-7676 | 1925 N 22nd Ave Ste 201 Bozeman, MT 59718 |
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