The extensive construction of rental housing is facilitating the apartment hunt in Minot, but the vacancy rate still remains quite low.
For June through August, the Magic City Apartment Association reported the vacancy rate was 0.8 percent.
Nationally, the vacancy rate is about 5 percent, so a rate of 1 to 2 percent in the Minot area indicates a strong demand, said association president Doug Pfau of Investors Management and Marketing. Although the vacancy rate may be up slightly from virtually zero not long ago, Pfau explained that the region is going through a normal seasonal adjustment as it heads into winter.
Photos by Jill Schramm/MDN
Beaver Suites Apartments, a 32-unit complex located west of Minot State University, shown Wednesday, opened this past summer.
"We anticipate the demand to increase substantially the first quarter of 2013," said Pfau, who noted that Minot isn't nearing any saturation point for apartments.
So far in 2012, the City of Minot has issued permits for construction of 722 apartment units, including 196 units just in October. The year-to-date total compares with 631 units permitted in all of 2011.
Minot's apartment association monitors about 4,500 units. The City of Minot has no firm numbers on current rental units overall.
Tom Pearson, director of Minot Housing Authority, said the increase in apartment units hasn't made a difference for people looking for affordable housing. About 400 people are on a waiting list in the voucher program about the same number as a year ago. Pearson said Housing and Urban Development is conducting a rent survey that could lead to a change in the determination of Ward County's fair market rent. If so, it would enable the voucher program to pay more so clients can look at units in a larger rental range.
One sign of more apartment availability, though, is the decreased pressure on hotels.
Wendy Howe, director of the Minot Convention & Visitors Bureau, said hotel managers report that long-term guests are moving out as they are finding more permanent housing. That's good news for the bureau, she said.
"For us, it's a positive in that we can really now push hard with the leisure market and try to get our Canadians back," Howe said.
Not all long-term hotel guests have moved on, though. Howe said hotels built for longer stays still have a strong base of clientele. However, the increase in flights from Minot International
Airport has prompted many oil companies to fly employees home during their time off, freeing up those hotel rooms for other employees. The result is a decrease in the number of rooms needed but a busier airport.
The home market currently looks a little more attractive for buyers, too.
"It appears that supply has caught up with demand somewhat," said Mike McEown, executive director for Minot Multiple Listing.
As of Nov. 5, there were 269 homes on the market, which McEown said is high for this time of year. The high numbers reflect the output of an active summer construction season as builders scrambled to meet demand.
McEown said Minot is entering the seasonal period when home sales tend to slow, but he expects a lot of activity next spring.
The average listing price in early November was $247,854, compared to $256,940 during the previous month when there were 175 properties on the market. The prices reflect a mix of housing stock, from renovated flooded properties to new construction.
McEown said the improved supply and demand is giving buyers a greater ability to get concessions or obtain price reductions on purchases.
Todd Fettig, president of the Minot Board of Realtors, said prices may be seeing a little give due to the market selection.
"We are not as starved for properties as we were probably a year ago," he said.
The real estate market has slowed from earlier this year, although Fettig said there still is lots of activity compared to even just a couple of years ago.
Fettig also expects the number of prospective buyers to increase next spring. A housing assessment released recently forecast a substantial increase in permanent employees in the Minot area, which translates into additional pressure on the home market, he said.
But Fettig also sees the housing supply growing to keep pace.
"If everything develops the way it looks like it will, there will be again a lot of new construction next year," he said.
Through October this year, the city has issued building permits worth $279.3 million, which compares to nearly $204.6 million during all of 2011. Statistics from the city building inspector's office show permits so far this year for 350 single-family homes, 198 townhomes and 73 condos. That compares with 292 single-family homes, 157 townhomes and 52 condos during 2011.