An oil production boom in a deeply Republican Midwestern state has sent home prices soaring and unemployment rates plummeting as a surge in new arrivals triggers a record population surge.
North Dakota officials once needed to attract people to the state, but interest has skyrocketed since the oil industry took off in the last decade.
The once deserted area is now thriving, but rising house prices have left some residents struggling to keep a roof over their heads.
Last year, the median home value was around $200,000, an increase of more than 20 percent from 2011.
“Homes have appreciated across the state and inventory is low across the state,” Beck said. Associated Press“This is a shock to many people.”
North Dakota officials used to have to convince people to move there, but after the oil industry took over, the population quickly exploded. (Pictured: Main Street in downtown Fargo, North Dakota)
Today, the Midwestern state, home to Badlands National Park (pictured), has a record-low population and the lowest unemployment rate in the U.S., with roughly 20,000 unfilled jobs.
According to data from the North Dakota Association of Realtors, the median sales price of a home in the Flickertail State last year was $201,991. In 2011, the median home price was $168,105.
The oil boom came just a decade after the state struggled with its population, but after officials funded job fairs across the country to entice residents to move there, people flocked quickly.
Today, the Midwestern state, home to Badlands National Park, has a record-high population and the lowest unemployment rate in the U.S., with about 20,000 open jobs.
With the influx of new arrivals, the state has struggled to accommodate them all.
“Young families are being priced out of the state because of high prices,” Beck said.
“I’ve heard stories of entry-level homes that were put up for sale overnight and the next morning there were 10 customers lined up out the door to see them.”
In addition to rising housing prices, rental prices have also affected residents.
The median sales price of a home in the Flickertail State last year was $201,991, compared with $168,105 in 2011. (Pictured: Construction workers lifting materials for a new apartment complex in Bismarck in 2012)
A recent study found that Williston, a city with a population of about 29,160, had the highest rental prices in the country: a one-bedroom apartment cost about $2,400 a month.
In Dickinson, another densely populated city in North Dakota, the average monthly cost of an apartment was $1,733, according to the study. The city, with a population of about 25,000, ranks fourth in the country.
By comparison, Jeff Zarling, president of a commercial development firm in Williston, said that a couple of years ago a two-bedroom apartment in the city averaged about $300 a month.
Zarling now believes housing costs have quadrupled in recent years.
Compared with known most expensive cities in the U.S., including New York and Los Angeles, both North Dakota cities had higher home prices, the study found.
Zarling said many people have been trying to cut costs wherever possible, even if that means living with others.
“You’re lucky if you can find anything for under $300,000. What this is really doing is leading to people becoming roommates,” she added.
Many residents have tried to cut costs by moving in together as housing prices and rents have skyrocketed. (pictured: Badlands National Park)
Low-income residents and seniors are also in trouble because populations have grown beyond what the state can handle, said Jolene Kline, executive director of the North Dakota Finance Agency.
North Dakota Housing Incentive Fund— a state-funded financing program that uses private and federal dollars to build affordable housing — will only be able to finance about 650 units this year, but Kline said that’s not enough.
“We are missing 3,000 people. Everyone should be very worried,” he warned.
While low-income and middle-class people continue to struggle to find housing in the state, wealthy residents have found themselves with more options.
A six-bedroom home with an indoor pool and 16-seat movie theater in Fargo has been listed for $2.8 million. The sprawling home last sold in 2007 for $1.8 million.
In the tiny town of Grassy Butte, a 2,000-square-foot home that includes a second rental home is also for sale for $2.8 million.
According to the listing, the new owners will receive $18,500 a year “for superficial damages caused by oil companies,” AP reported.