Distinctly Montana Magazine

which determine the Affordability Index. Consumer confidence also plays a huge role. The U.S. Affordability Index is at a five-year low, but is still the fifth strongest year in the past 40. Here are the challenges we face. First, interest rates are increasing, up about 1% in the past 12 months. This factor is out of our local control and there is a strong likelihood the upward trend will continue. Housing prices are increasing, especially in the lower half of the market. This pressure will continue in Montana. Lastly, although our job growth is good, personal incomes throughout the state are not keeping pace with interest rates and housing prices. 4. Will median housing prices increase across Montana in 2014? Nationally, the median home price has increased over 18% in the past two years. The National Association of Realtors chief economist, MediaN HOME PRICES Lawrence Yun, predicts 5% to 8% increases for 2014. Most Montana markets have experienced at least 8% to 10% increases in median prices during the past 12 months. Prices will be directly impacted by inventory levels. Expect to see expanded new construction starts across the state. New home prices will increase based on higher land costs, labor, and materials. 4 www.distinctlymontana.com 5. Why is the Mountain Region leading the way in job growth? One of the strongest predictors and leading indicator of recovery is employment stability along with new job creation. And here we find even more good news for us with Montana's unemployfast job growth ment rate falling to 5.2% in October 2013 in comparison to 7.3% nationally. Our lowest rate was 3.1% in 2006 and highest was 6.8% in 2010. Interestingly our Mountain region, fueled by high tech and energy, is leading the U.S. in job creation with five of the Top 5 states for growth. North Dakota has a 3.2% increase in jobs, followed by Utah at 2.7%, Idaho at 2.5%, Texas at 2.4% and Colorado at 2.3%. 5 All in all, we should see a strong play for 2014. Of particular note will be the much anticipated and long awaited rebound of the second home and resort markets. The acquisition of Moonlight Basin and Spanish Peaks provide unification to the Big Sky Resort, which should garner strong national skier attention. With the onset of snow comes skiers, visitors, and hopefully buyers who will see the smoke signals and recognize the variables are all in place for the "timed buy" and the next wave of appreciation. "Of particular note will be the much anticipated and long awaited rebound of the second home and resort markets" 75

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