With fewer people streaming into the state, demand for housing has slowed in central and western North Dakota during the past year. As a result, buyers are taking more time, looking at as many as 20 to 40 homes rather than being required to act fast and "take it or leave it."
While the number of homes sold is down and apartment vacancy rates are up, Nancy Deichert, executive director of the Bismarck-Mandan Board of Realtors, calls the small decline "a return to normal."
Statistics show a 7 percent decrease in the number of residential units sold as of Monday through the Bismarck-Mandan area’s Multiple Listing Service, compared with last year. The total number of units sold is still above the number sold during each year since 2006.
"Ours is still very much an active market with listings going under contract every day,” Deichert said. "An increased inventory of homes on the market provides buyers with more options."
In the apartment market, vacancy rates have begun to creep up along with supply.
Jeremy Petron, president of the Bismarck-Mandan Apartment Association, said a lot of units have been built and the influx of people into the area has slowed. He said the area may even be a little overbuilt when it comes to apartments. Combined, those factors have led to an average vacancy rate of 5 percent to 6 percent, according to an association survey.
Vacancies at newer complexes are higher, around 10 percent, because most of those are higher-end apartments, Petron said.
A high-end, three-bedroom apartment typically rents for $1,300 to $1,500 per month. Rental rates at older properties, those built more than 10 years ago, are seeing rent rates remain more stable, about $650 to $850 per month for a two-bedroom, Petron said.
The rental rates of newer complexes will depend upon the vacancy rate with which owners are comfortable, Petron said.
“The reality is, if the economy isn’t going to bring in (renters), they’ll certainly have to adjust,” said Petron, adding that he thinks decreases in demand due to low oil prices have already worked their way out of the Bismarck market.
“Even though inflow has slowed down, I think we have enough diversity of industry we’re still seeing normal population growth,” he said.
In Watford City, the number of vacant apartments is way up.
“There’s a pile of them coming online now,” said Gene Veeder, public relations director for McKenzie County Development. “Availability is much different than this time last year.”
Rent is more competitively priced, $1,200 to $1,600 per month for a two-bedroom is common, Veeder said.
“You still see some $2,500 but not many,” Veeder said.
Single-family homes are being built at a slower rate but construction continues, said Veeder, who added that the cost of real estate and infrastructure has pushed home prices above what people are interested in. Before the oil boom, builders constructed only one or two homes annually for about 20 years, he said.
Many still want rental property for now. The higher cost and lower availability of single-family homes is one factor. The other is overtime hours were cut for those that who remain and they don’t want to invest until they see what happens with oil prices, Veeder said.
“Demographic has a lot to do with what’s going on with the credit side of things,” he said.
A typical single-family home costs from $250,000 to $300,000. A 20 percent down payment makes it hard to get a loan and some might be reluctant to buy because they got upside down on a house previously.
"We don’t have inventory of older homes on the market," said Veeder, adding that many were snatched up by companies for housing their workers and others were turned into rental units.
"What we don’t see anymore is a $75,000 house going for $300,000," Veeder said.
A lot of new construction is taking place east of town along Highway 23 in the Fox Hills development and to the north where Main Street has been extended. Veeder said there are three or four developments with hundreds of homes planned where the city ran water and sewer.
Veeder said housing is something McKenzie County officials talk about on a daily basis.
"It is a monumental task trying to figure out where we're going," he said.
The county is working with the state on a survey to determine what the public wants and needs.
Despite the downturn in oil activity, the number of residential units sold in Dickinson increased by 14 percent in 2015, said Barb Lupo, association executive for the Badlands Board of Realtors.
"This trend continues upward due to the increase in new industries other than oil. Dickinson continues to diversify business-wise and looks to remain economically stable because of this," she said.
On a November day in Williston, there were 261 homes for sale with 28 of them with a contract pending, said Kassie Gorder, president of the Williston Board of Realtors.
At the height of the boom, those homes would have been on the market a day, a week, maybe two at the longest. Now, on average, a home will stay on the market 50 to 60 days, some closer to 90 or 120 days, Gorder said.
Oil companies are not going to pay employees' way anymore, Gorder said. Layoffs have created a fear factor, and many are worried about tying themselves up with a mortgage. In the meantime, some are renting, sticking it out to see what happens.
The homes that are for sale vary from new construction and older homes that have been remodeled to homes that need remodeling and mobile homes on a piece of land, Gorder said.
Going into winter, Gorder expects it to slow even further through the new year and possibly into spring.
"I think buyers out there are not rushing into anything," she said.
That's not all a bad thing, said Gorder, who added that potential home buyers are able to make better financial decisions without the worry of houses being sold before they can cut a deal.
Gorder said people often ask her when the prices are going to drop. She says they did, about six months ago.
Older remodeled homes are more desirable because many people are afraid the new homes built in a hurry weren't constructed well, Gorder said. The older east side tends to be favored. Many homes in a four-block radius go for $350,000 to $450,000. Closer to the college, they go for about $200,000 to $325,000.
Gorder said there are tons of apartments in Williston.
"It seems like they're going up everywhere," she said. "As far as I know, they're not full."