In The New West magazine
Western Outlook: Partly Sunny, With a Chance of Recession
By Robert Struckman, 2-11-08
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The economic watchword of the moment may be “recession,” but in the upper Mountain West, continued growth is tempering the impact of tight credit markets and the slowdown in residential construction.
In Colorado, energy development and commercial construction as well as investment in the mountain resort areas has offset a weak residential real estate market on the Front Range, said Mark Schweitzer, a Denver-based economist for the Federal Reserve Bank of Kansas City.
“The resort region and the energy region, right next to each other, are intertwined,” competing within the same workforce for employees, Schweitzer said.
In Utah, construction growth remains double-digit strong, driven by one of the highest population increases in the nation and a strong job market. Utah had more than 84,000 new residents in 2007, split between new births and migration, according to federal numbers.
Unemployment in the Beehive State remained at just 3.2 percent last year. Top job growth categories were mining, construction and manufacturing. “If you moved to Utah right now, you’d find three jobs,” said Dave Anderton, spokesman for Salt Lake Board of Realtors.
Wyoming has the enviable task of managing its overflow of state tax revenue from the energy boom, which has also spurred growth in Montana, said regional economist Tobias Madden of the Federal Reserve Bank of Minneapolis.
Construction, tourism, strong agricultural prices and high metals prices also boosted the two states.
Along the Canadian border, merchants in Montana, Idaho and Washington are reaping benefits from the weak U.S. dollar, as northerners flock across the border to make big-ticket purchases.
All of that explains this ranking: the top five states for price increases in single family homes in 2007 (yes, we’re talking increases) were Utah, Wyoming, Montana, New Mexico and Washington.
The markets with steep declines in median single-family home values were those that saw big bubbles. A single-family home in Big Sky, Mont. — at a median price of $1.6 million in 2006 — fell 12 percent to a median of $1.4 million in 2007 and likely has more to go.
Prices are still more than triple what they were in 2003.
Construction activity across the region is tapering, but not dramatically.
“I’ve noticed homebuilders bidding against me on remodel projects,” said Frank Scariano of Scariano Construction in Missoula. Still, he’s not worried about his 2008 schedule. “We’ve got a fair amount of stuff lined up,” he said.
This story first appeared in the preview issue of The New West magazine. For more information on the magazine, or to subscribe, go to www.newwest.net/magazine.
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