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State of the estate

Real estate market slows its pace in Minot area

Jill Schramm/MDN An open house is held Feb. 12 for a home for sale in northwest Minot.

The Minot-area real estate market has settled into calmer times as it moves away from the frenzied activity spurred by a flood and energy development. It’s meant a somewhat slower pace of sales and a leveling off of property prices.

The number of homes being sold is down about a third from its peak but prices have seen only a small decline.

“It’s much more balanced now. You can’t really say it’s a seller’s market. You can’t really say it’s a buyer’s market,” said Cindy Harvey, Realtor with Elite Real Estate and past president of the North Dakota Association of Realtors. “Prices are holding steady. There’s more inventory.”

A balanced market is considered to have five to eight months of inventory, reflecting how long it would take to sell all current listings if no new listings became available. Minot is at 5.5 months of housing inventory, said Harvey.

During 2016, Minot Multiple Listing reported 840 residential properties sold in the Minot area, of which 621 were within the city of Minot. Total home sales on MML dropped from 950 in 2015 and from 1,142 in 2014. The peak was 1,204 sales in 2012.

Days on the market is higher than it used to be, jumping from an average 78 days in 2015 to 91 days last year. However, changes in the lending industry have added time to closings, which accounts for some of the longer time on the market last year, Harvey said.

A house priced below $200,000 that is in good condition sells quickly, she said. As of last Tuesday, Minot had 49 active single-family houses, townhomes or condos on the market between $100,000 and $250,000, or about 37 percent of the inventory.

The average home sale price in 2016 was $231,748 in Minot, down 1.1 percent from $234,356 in 2015 and down 1.5 percent from the average annual peak of $235,084 in 2014. The average home sale price, including the rural area, was $223,848 in 2016, down 1.2 percent from $226,553 in 2015.

“There are a lot of people waiting, thinking it will drop more,” said Blake Krabseth, Realtor with Watne Realty. “They are just being careful. There’s plenty of inventory to look at so you can take your time. It isn’t like right after the flood and the peak of the oil boom – if you thought about a house too long, it wasn’t there the next day. Now you can take your time.”

Ninety days remains the typical time on the market if priced right, he said.

“Those that are sitting longer on the market are probably over-priced,” he said. “That’s why you need to hire a professional real estate agent to make sure you price your home right to sell on the market.”

Prices have avoided a slip back to pre-flood and pre-boom levels, possibly because homes were under-priced previously, based on what was happening in the national market, Krabseth said. The average sale price in 2010 in Minot was $172,712.

Minot also has some diversity in its economic base and is able to offer good jobs, which keeps housing prices stronger, Krabseth said. Another factor is interest rates that have remained low.

Bruce Walker, Realtor with Coldwell Banker, said Minot’s abundance of rental housing and drop in rents has encouraged some people to lease while waiting for home prices to come down more. However, Realtors are not predicting any significant price drop, and there’s the risk any price drop will be offset by an interest rate increase.

“I think we are going to see a leveling off now,” Walker said of home prices. “I think we have seen the swing up and the swing back down to more of a level playing field.”

If there’s a negative, it’s the impact the current market is having on homeowners who had purchased during the peak of the boom and now are needing to sell only a few years later, Harvey said.

“They are having a hard time walking away with a profit. I have seen people have to bring money to the table now,” she said.

Overall, though, it’s still a good time to sell, she said. March tends to be the busiest month in the real estate, which means competition for sellers but also more buyers in the market.

With the construction flurry that took place in recent years, buyers also have a more updated inventory to choose from. From that standpoint, the selection is better than it has been in the past for buyers looking for newer homes, Harvey said.

In smaller communities in the area, the housing market has been reacting in a way similar to what is occurring in Minot, Krabseth said. Burlington and Surrey, given their proximity to Minot, share Minot’s market indicators. Prices haven’t dropped much in places like Velva and Berthold, but prices are more affordable if buyers are willing to commute, Krabseth said.

Housing markets farther west that were very tight now have opened up, he said. To the east of Minot, prices did not rise much with the oil activity, so there is little change occurring now.

Krabseth said interest in commercial property has picked up, although it hasn’t necessarily translated into sales. Most companies are exploring while they wait for their markets or the economy to reach certain markers.

“I think they are just feeling around, looking for bargains, looking to see what’s available,” Krabseth said. “They are kicking tires now. They weren’t even kicking tires before. At least they are out looking.”

Minot City Home Market

Homes sold Average price Median days on market

2006 594 $127,367 66

2007 658 $128,111 63

2008 690 $144,225 57

2009 663 $165,446 60

2010 724 $172,712 63

2011 760 $190,843 66

2012 926 $210,823 74

2013 849 $222,990 86

2014 848 $235,084 80

2015 703 $234,356 78

2016 621 $231,748 91

Source: Minot Multiple Listing

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