BISMARCK, N.D. — Homeowners in California or Florida may be hurting, but in North Dakota, you can still sell a house for more than you bought it for — and get a favorable loan, too.
While home sales are slumping nationwide, North Dakotans are finding buyers — even in the winter. The state has managed to duck the worst of the housing crunch thanks to a strong local economy and conservative lending that avoided the worst excesses of the mortgage market bubble.
“One of the reasons I live in North Dakota is that we have a stable economy and a stable real estate market,” said Kris Sheridan, a Fargo real estate agent. “We may be freezing to death today, but we’re not having the tough times like everyone else in the country.”
Sheridan said more home buyers are popping up after the Federal Reserve cut a key interest rate. The Federal Reserve sliced rates by half a percentage point Wednesday after a cut of three-fourths of a point a week earlier.
“It’s just frosting on the cake for people in this part of the world,” she said.
North Dakota’s largest cities, Fargo and Bismarck, are seeing healthy housing sales. The National Association of Realtors ranked Bismarck as the No. 1 area in the country in percentage increase in the value of single-family homes, and Fargo was 24th. The median sales price of a single-family home in the Bismarck area for the last quarter of 2007 was $161,600, a 15 percent increase. The median price in the Fargo area was $145,700, a 6 percent jump.
Resales of single-family homes in the Fargo area increased 4.1 percent last year, to 2,707, from 2,600 homes in 2006, said Brenda Martinson, president of the Fargo-Moorhead Area Association of Realtors.
Experts credit the healthy housing market to a strong local economy and the lowest rate of subprime loans in the country.
A Mortgage Bankers Association survey shows that only 2.7 percent of the 2007 mortgages in North Dakota were classified as subprime — loans made to people with limited or sketchy credit histories that typically have a higher interest rate based on a higher risk.
Robert Denk, a senior analyst and forecaster for the National Association of Realtors, said that is the lowest rate in the country.
“Everyone expects a large share of these loans to go bad eventually,” Denk said. “The discussion tends to be about who has the most or least of these time bombs, and when they’ll go off.”
