Fargo-Moorhead, N.D.: A Stable Housing Market

As news of foreclosures and the bad credit mortgage mess continues to sweep the nation, Fargo-Moorhead (N.D.) housing industry officials say the metro-area market remains stable and a good investment.

“From our standpoint, all we can say is look at the numbers,” said Daryl Braham, president of the F-M Area Association of Realtors.

Nationally, the picture isn’t rosy: Sales of existing homes fell by 8.4 percent in March after rising for three consecutive months, according to a report Tuesday by the National Association of Realtors.

The Midwest was hit even harder, with existing-home sales dropping 10.9 percent. Poor March sales were blamed on bad February weather that slowed contract signings and also on lenders being more conservative due to foreclosures in the subprime home loan market.

Locally, sales are on the upswing, Fargo-Moorhead Area Association of Realtors data shows. From January 1 to Wednesday, sales of existing single-family homes, condos and twinhomes in Cass and Clay counties increased 2.5 percent compared with the same period last year.

• The dollar volume of sales also jumped 7.1 percent during that same period, from $60 million to $64 million, according to the association.
• The average sale price of a single-family home in Cass and Clay counties during that period was $151,200.

Braham said the F-M housing market hasn’t experienced the sharp upswings in home values - 20-40 percent annually - as seen in coastal areas and major urban centers in recent years.

As a result, downswings are less severe in this area.

“We don’t need to have a correction, because we didn’t go way up in the first place,” he said.

Figures from the Fargo city assessor’s office seem to support Braham’s claim of a stable housing market.

The number of single-family homes sold from January to March was 211 in 2005, 212 last year and 213 this year.

Sales of single-family homes in Fargo totaled 1,209 in 2006, down 146 from 2005. But the median sale price continued to rise, from $137,100 in 2005 to $145,400 in 2006 - a 6 percent jump.

“We just have a nice, steady, consistent growth pattern, which has allowed us in our market to stay as strong as we are,” Braham said.

New home construction also continued at a strong clip in 2006, with 1,159 permits being issued for new housing in Fargo, Moorhead, West Fargo and Dilworth.

Permit numbers were down a bit during the first quarter of this year, partly because of “the deepest frost we’ve seen in the ground in years,” said Mike Arnold, past president of the Home Builders Association of Fargo-Moorhead.

But building material costs are at a five-year low, and lumberyards and builders are optimistic about the remainder of 2007, he said.

“Everybody is nothing but excited. We expect to have a very, very strong year,” Arnold said.

“The only thing that’s negative in our industry locally is probably (the) high-end new construction has definitely slowed,” he said. “Both workforce housing and middle-range housing are moving along at a pretty great pace.”

Many areas of the country have reported an increase in foreclosures, attributed in part to lenders granting creative sub-prime (bad credit mortgage loans) to homeowners with flimsy credit.

Nationwide, foreclosure filings topped 430,000 in the first quarter of this year, up 35 percent from a year ago, according to a report Thursday by RealtyTrac, a national foreclosure tracking firm.

Arnold and Braham both said local home loan lender and broker groups appear to have been more conservative in lending, resulting in fewer foreclosures locally.

“We’re not seeing that trend happening here,” Braham said.

RealtyTrac reports that first-quarter North Dakota mortgage foreclosures in Cass and Clay counties were down 18 percent compared to last year, from 51 in the first quarter of 2006 to 42 in the first three months of 2007.

Buyers have more houses to choose from in the area than they did a year ago. Total listings of existing single-family homes, condos and twinhomes in Cass and Clay counties in the first quarter were up 2.5 percent over the first quarter of 2006.

Braham said homes are sitting on the market longer than they were a year ago, which he attributes to negative press about the national housing market that doesn’t necessarily hold true in Fargo-Moorhead.

“Our market is in a very, very good place, and I believe for the next 20 years is going to continue to be in a good place,” he said.

SOURCE: The Forum