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Outdoor interest means growth for Missoula tech firms, housing prices

Outdoor interest means growth for Missoula tech firms, housing prices

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A surge in interest in backcountry outdoor recreation, where people can be socially distant while on an adventure during the pandemic, has been a boon for one Missoula tech company.

The firm, onX, has created digital products and apps that allow users to navigate without cell service while also viewing land ownership, topography and other layers on their phone or electronic device.

"In 2020, onX saw growth across its user base, as folks turned to the outdoors in increasing numbers last year," said senior communications manager Molly Stoecklein. "In fact, from March through May of last year, we saw three times the growth than in years past. That timing may correlate with lockdowns across the US."

The coronavirus pandemic and Montana's outdoor recreation opportunities are two factors that have also caused huge changes in the real estate and high-tech industries here as well.

That's according to experts who spoke at the virtual 2021 Economic Outlook Seminar hosted by the Bureau of Business and Economic Research at the University of Montana on Monday. The seminar covered a range of topics from housing to healthcare to forestry to tech.

Wide-open spaces in Montana and the global shift to remote work have attracted tech workers to the state who would rather work here than in crowded, expensive cities, according to Christina Henderson, the executive director of the High Tech Business Alliance.

"The influx of tech workers in Montana has caused both opportunities and challenges," Henderson explained. "It could be good for Montana companies if it brings more talent. Also, local employees have access to gain more secure employment if they're not limited to just what's in town. But the challenge is if out-of-state companies can pay higher wages, this new influx of residents is also creating pain points recently in housing prices."

Henderson said places like Missoula and Bozeman are examples of "Zoom towns," where people coming from relatively more expensive cities are choosing to come work remotely because they can buy housing easily. Henderson told an anecdote of an acquaintance in Butte buying not just one but two houses in Butte because of the relatively cheap prices compared to places like San Francisco.

"To wealthy people who come from more expensive places, Montana real estate can seem like a deal," she said.

She said many tech firms in Montana saw growth in 2020 because they were well-positioned to adapt to remote work and other changes. Missoula, specifically, is home to biotechnology firms like Rocky Mountain Biologicals and Inimmune that saw strong growth because of the pandemic. Another Missoula tech company, Cognizant ATG, recently broke ground on new buildings in the Old Sawmill District that would allow them to add 350 employees  to the roughly 200 they already employ.

There's plenty of evidence to show that the pandemic and associated lockdowns meant that many people renewed or gained more interest in outdoor recreation opportunities as well. Montana, for example, saw 3.4 million visitors in 2020, a 30% increase compared to 2019.

OnX, the Missoula digital mapping tech company, was poised to take advantage of a surge in interest in hiking, hunting, camping, backcountry skiing and other off-road adventurous pursuits.

The company, which employs scores of people in Missoula and Bozeman, saw new opportunities for growth last year, acquiring Adventure Projects Inc. and Outdoor Project, both contributor-driven outdoor experience hubs. ​

"Our mission is to awaken the adventurer in everyone," said onX vice president of product management Chris Hamilton. "We look forward to supporting Adventure Projects' unrivaled and passionate community. Their outdoor guides have inspired millions of climbers, hikers, skiers, trail runners, and bikers alike. Our goal is to help everyone have the best outdoor experience possible by arming them with technology to discover and explore new places, safely and confidently."

The high-tech industry is an important economic driver in Montana, Henderson noted. In 2020, her organization surveyed 600 firms in Montana and found that the industry represents $2.5 billion in annual revenue.

"The high-tech sector in Montana is growing nine times faster than the overall economy and pays twice the median wage," Henderson said.

Those same factors that have boosted the high-tech economy here, combined with sluggish housing construction, have caused housing prices to surge to never-before-seen levels in the state, according to economist Brandon Bridge with the Bureau.

He said lagging construction and a spike in demand has driven those prices far past any gains made in median incomes in Montana.

"If I had one way to describe the housing market in Montana, it would be a booming seller's market," he said. "We see strong price increases, tight inventories, not many houses for sale and inventory moving fast."

Final data isn't in yet, but the Missoula urban area's median home sales price was right around $350,000 in 2020 according to the Missoula Organization of Realtors. That is a 37% increase from the $255,000 median sales price 2016.

Bridge noted that the remote-work boom has also been a contributing factor to the rising housing prices, as people choose Montana as their new home.

"Remote work will continue to spur Montana housing markets, and affordability will get worse," Bridge said. "Interest rates are going to stay low, and that will continue to spur demand. In the next year, I'm afraid to say, affordability will get worse."

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