You won't find a housing slump here

Posted by: Prashant Gopal on November 21, 2007

The National Association of Realtors’ new third-quarter survey of single-home sales suggests a national real estate slowdown. But if you ask a home seller in North Dakota, you might hear a different story.

North Dakota and Vermont are the only two states where sales increased from the same period in 2006 (The Realtors group had sales data for every state except Idaho and New Hampshire). Vermont existing home sales rose just 0.8%. But sales in North Dakota increased by a healthy 2.9%. And in Bismarck, North Dakota’s capital, home prices jumped 15.1%, compared to a year ago, to $161,600. That’s the highest increase for any metro area in the country.

Local real estate agents in North Dakota say the housing market has stayed strong because of the state’s robust economy, which has been bolstered by new investments in oil drilling and ethanol plants. And new home construction wasn’t as rampant during the boom as it was in the Florida, Las Vegas and California where builders now have started slashing prices to unload unsold homes.

Bismarck Realtor Terry Stevahn tells sellers not to get confused by national real estate reports.

“I tell them to ignore it because it is not pertaining to us,” Stevahn said.

Reader Comments

Nemoudeis

November 22, 2007 6:13 AM

Hey, if you can stand to live in North Dakota, by all means go there. It's brain-meltingly hot in the summertime, Godawfully frigid in the wintertime, and maybe two weeks of habitability in-between. Not much to do but bullseye prairie dogs and watch cable TV; but if you like flat horizons, boy have they got a deal for you.

Big Guam Fan

November 25, 2007 7:27 PM

Yes - Overall, real estate is in for a big correction in the U.S. However, some places doing quite well, and it looks like North Dakota is one.

Believe it or not, another tiny spot in the U.S. is doing quite well also. The tiny U.S. island of Guam is doing very well with YOY sales and prices up substantially.

Why? A massive U.S. military move is slated from Okinawa to Guam from 2008-2014. It will bring an additional 40K people to an island with a current population of only 170K. Small numbers population wise but consider that Guam is small to start with, hence real estate values rising.

Additionally, Guam is coming out of a 10-14 year recession. Currently, homes are still cheap but not pretty to look at as they are built with concrete for tyhphoon protection.

I just bought a brand new 3/2 1200 sq ft and rent it to a navy member for $1,900 a month. My PITI is only $964.

Cons: the tyranny of distance (3,000 west of Hawaii), snakes, typhoons.

Pros: cheap houses, very low inventory, unnatural demand (from the government), beautiful beaches and diving.

Low inventory and cheap prices combined with high housing allownances for U.S. military personnel make Guam a great oppourtunity.

I'll go back into the mainland around 2009 when there's blood in the streets.

Tony

June 6, 2008 2:17 AM

My name is Tony and I live on the island of Guam. I believe Guam is in for something really big and I was wondering if you still believe Guam homes are still a good investment. I've been trying to find literature on island real estate but can't seem to find anything. Can you recommend anything that might help me understand just how long I should keep my two brand new homes? Thank you.

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About

BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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