2010 North Dakota Housing Market

Gol Stave Church Museum - MinotIt may have a reputation for cold winters, but if you’re looking for a job North Dakota might be the place to look first. Driven by the best employment rate in the nation and one of the lowest foreclosure rates, North Dakota is making its way out of the national housing downturn with little fanfare.

By and large, North Dakota has missed the majority of effects from the housing bubble. With an unemployment rate hovering in the mid-3% range, the state is considered to have full employment. Few foreclosures are counted monthly, and with low mortgage rates home sales remain at nearly a consistent pace.

A lack of Alt-A and subprime mortgages accounts for the state’s good fortunes along with a robust natural energy business that is drawing new homeowners to the state. A boom in wind energy, coal and oil production is driving the economy.

The financial crisis has had some impact on the state as a handful of large businesses laid-off workers, slowing home sales amid growing concerns over the recession, but the small number of job cuts has had little impact on the state’s economy.

New home construction has helped to lead Bismarck out of any slow down as the number of residential permits needed to start building new homes more than doubled that of 2009. The federal tax credit boosted home sales for a time and few restraints in home building are projected to help Bismarck grow at a time when many other areas of the country are doing the opposite. Bismarck is forecast to see average home prices rise 4.0% in 2010.

In Fargo, homes along the Red River have been repaired from massive flooding nearly two years ago, while others have been abandoned as homeowners sought new places to live after federal aid helped to boost home sales. Fargo is adding jobs to its payrolls as the economy pulls out of the financial crisis.

As Fargo’s business sectors grow more new employees attracted to the area are becoming homeowners, and that trend is expected to last, pushing Fargo to average housing inflation of 4.3% for the year.

The military base in Grand Forks strengthened the local economy for a while during the downturn, but as enlistees got in trouble with mortgages that were too expensive to afford, Grand Forks saw a sharp rise in foreclosures. Most of those homes were quickly resold and the market returned to a balance.

Prices on new homes aren’t expected to move much over the rest of the year as Grand Forks re-sales keep sputtering along due to military relocations. Grand Forks is forecast to see average home prices rise just 3.2% in 2010.

In Minot, little has dramatically changed since the financial crisis hit the national news. The federal tax credit and U.S. Department of Agriculture Rural Development mortgages helped to boost home sales as buyers took advantage of the programs. The Rural Home Mortgage program is projected to increase sales through the remainder of the year. But there are no hair-raising stories of huge inflation in housing prices in Minot as it moves to a modest inflation forecast of 3.4% for the year.