North Dakota Association of Realtors president; Housing market has priced some ‘out of their dream’ homesApril 8, 2022
Potential homebuyers in North Dakota are having a difficult time finding affordable housing as home prices continue to soar and houses are on the market for increasingly shorter time periods.
Shawn Ostlie, president of the North Dakota Association of Realtors, told The Center Square the market in North Dakota is similar to most of the U.S.
“We have a low supply of inventory and, with interest rates where they are at, a large number of buyers in all price ranges,” Ostlie said. “In addition, new construction to fill the void has challenges as well. As supply prices continue to fluctuate, workforce shortages make labor costs higher when you can secure them and supply shortages delay closings on a home to where it is very difficult to pin down a closing date and sometimes pricing before or during construction.”
Ostlie said most markets around the state have seen larger than average appreciation in the last couple of years due to the supply and demand issue. In 2020, the increase was around 7% in the local market, while in 2021, it increased to more than 10%, Ostlie said.
This type of market is challenging for first-time homebuyers.
“As interest rates drop, they can afford more houses, but with low inventory, home prices rise,” Ostlie said. “When the market is semi-stable, this can offset a little as far as a monthly payment is concerned. However, in a ‘hot’ market, it can mean a few homebuyers get priced out of their dream for a period of time.”
Affordable housing is still available, Ostlie said, but it is progressively harder to find. One solution for some people, especially those who are now working from home, is to search rural markets that may not have been options if they were required to commute. Ostlie said prices may still be going up in rural areas, but rates are at a significant reduction when compared to larger cities.
This soaring housing market is also having an impact on the state’s economy, Ostlie said.
“The numbers from the Nation Association of Realtors in 2020 show that every home closed averages about $80,900 of economic impact on our state,” Ostlie said. “With fewer closings because of lower inventory, that can have a huge impact on our state’s economy.”
This article was originally posted on North Dakota Association of Realtors president; Housing market has priced some ‘out of their dream’ homes