Why Are the Ultra-Rich Buying Land in Montana?
Over the last few years, the rich and ultra-rich have looked to the Midwestern United States as both an escape from bustling coastal cities and lucrative investment opportunities. With its large plots of land, rustic ranches, and beautiful scenery, Montana and other western states have become something of a getaway for the ultra-wealthy in the last decade.
Of course, that merely begs the question: Why are so many wealthy people buying land for sale in Montana? Here, we’ll explore the recent migration of the ultra-rich to Montana and what it signifies for the future of land ownership.
Let’s get started.
Why Are the Rich Moving to Montana?
According to Forbes, land sales in Montana’s Big Sky and Bozeman jumped nearly 40% and 50% in 2021, following a large influx of wealthier Americans buying property in the state. Below are just a handful of the reasons the wealthy have set their sites on buying land for sale in Montana.
#1 – Land
Being the fourth largest state in the country, Montana consists of over 98 million acres of land, over 60% of which are fertile enough for agricultural production. Land has historically been one of the most stable investments a person can make. Why? Land is a finite resource and is usually always in demand.
Given Montana’s rising land prices, the wealthy know that they can park their money in the state’s land assets and watch it appreciate in the long term. According to the 2022 USDA Land Values Summary, the average price of an acre of land in Montana in 2022 was $1,030 — a 10.1% increase over 2021. As more wealthy individuals flock to Montana, land prices are expected to keep appreciating.
#2 – Natural Resources
Montana is also home to a wealth of natural resources, including timber, copper, gold, sulfur, natural gas, oil, and precious gems. Petroleum and gas refineries generated over $6.3 billion in 2019, and hard rock mining generates more than $2.7 billion a year. Further, Montana’s timber industry totals over $550 million in revenue every year. Landowners in Montana can create a profitable revenue stream by leasing out the mineral rights to their property..
Aside from mineral resources, Montana has an abundance of natural capital in its beautiful landscape and diverse biosphere. The temperate weather is perfect for cattle ranching and farming, and Montana’s agricultural sector contributes over $5 billion to state GDP every year.
#3 – Lifestyle
Another reason why the wealthy are rushing to Montana could be lifestyle considerations. Montana is full of natural beauty and an amazing outdoor recreation spot, like skiing, hiking, camping, and more.
No doubt the success of recent TV programs, like Paramount’s Yellowstone, has increased Montana’s national profile and spurred interest in wealthier individuals pursuing a life surrounded by nature, away from the hustle of the big city.
Additionally, some believe eccentric, wealthy individuals have been buying land in rural areas across the country as a private refuge in the event of societal collapse or a global doomsday scenario. But take that hypothesis with a grain of salt.
Where Do the Rich Go in Montana?
The city with the highest mean income in Montana is Whitefish in Flathead County at $111,754. Bozeman and Belgrade are the next two highest on the list, at $95,595 and $94,990.
However, Missoula is the city with the most wealth, home to billionaires Dennis Washington and Linda Pritzker. Other hot spot locations for the ultra-wealthy in Montana include Big Sky, Three Forks, Belgrade, and Billings.
What Is Montana’s Upper-Class Income?
According to data from Statistical Atlas, the median annual household income in Montana is $48,000. The median household income for the top 20% of earners is $94,000, and the annual median income for the top 5% of all earners is $167,000.
Who Is the Richest Person Living in Montana?
According to a report from the Longview News-Journal, the richest person living in Montana is Dennis Washington. Washington has a net worth of $6.6 billion and is currently the 382nd wealthiest person in the world. Washington built his wealth as the head of Washington Group International, which provides engineering, construction, and management services. Washington currently resides in Missoula.
Marianne Liebmann is the second wealthiest individual in the state, with a net worth of $3.9 billion. Liebmann is the heir to the Cargill food corporation, founded by her great-grandfather William Wallace Cargill in 1865.
Other high net-worth, high profile land-owners in Montana include media tycoons Ted Turner and Rupert Murdoch, sports team owner Stan Kroenke, and the Harding family of Sinclair Oil.
Who Is the Biggest Landowner in Montana?
The two largest land owners in Montana are technically the Federal and State governments, which own 27 million and 5 million acres, respectively. The largest private owners of land in Montana are billionaires Dan and Farris Wilks, also known as the Wilks Brothers, who together own 672,000 acres. The Wilks brothers made their fortune from hydraulic fracking in the early 2000s.
The private company with the largest land holdings in the state is Plum Creek Timber, which owns 795,925 acres. Plum Creek Timber is a conglomerate with activity in forestry products, natural resource extraction, real estate development, and timber.
How Will This Influx of Wealth Affect Montana Land Prices?
In the short term, the rush to acquire land out west will most certainly increase land prices and the cost of living in Montana. Within Bozeman alone, the cost of a single-family home jumped over 24% from $680,000 in 2021 to $847,500 in 2022.
In the long run, wealthy individuals purchasing land will change the distribution of land ownership. As wealthy individuals buy up land from current asset-rich but cash-poor owners, the overarching structure of land ownership in the state is changing.
Comments(2)