North Dakota Association of Realtors: Housing market has priced some ‘out of their dream’ homes

(Source: The Center Square) – 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.”


LCD Group’s DREAM Fund: Helping make homeownership dreams come true

Lewis & Clark Development Group, North Dakota’s only NeighborWorks America chartered organization, provides various housing programs and services like the DREAM Fund, which provides financing that traditional lending programs cannot provide for to help: 

Down payment and closing costs;
Emergency Repairs;
And other housing-related loans, including construction and construction-bridge loans;
Mortgage assistance to overcome lending barriers, including appraisal and affordability gaps.

What is the DREAM Fund?: The DREAM Fund provides financing that traditional lenders are unable to provide. This innovative program helps borrowers meet down payment and closing costs, finance rehabilitation and emergency repairs, and assist with other housing related costs.

Eligibility: Persons living throughout North Dakota and in Corson County, South Dakota are eligible for the DREAM Fund. Loans are awarded to borrowers who have, or can, demonstrate the character and capacity to meet their loan payments.
Property Requirements: The property must be owner-occupied within 60 days of the loan closing, except in the case of construction financing. Mobile homes not on a permanent foundation do not qualify.
Conditions, Rates, Terms and Fees: The DREAM Fund is a collaborative program involving the borrower, lender, and LCD Group. Rates and terms are structured so total payments are affordable to the borrower. Interest rates are typically at market rate or lower. An application fee is charged. Fees for other out-of-pocket expenses incurred by Lewis & Clark Development Group may also be applied. Homebuyer education may be required.

Let LCD Group help you. Contact our DREAM Fund Expert…
Lisa Pogatshnik (NMLS# 180495) 
LCD Group Housing Director
Phone: (701) 667-7603

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