Minot Is The Place To Live!!!

Recent news has been cause for excitement in the Minot area regarding jobs, population growth and certainly in the area of real estate. While most of the headlines across the country are showing declining markets and lagging consumer confidence, that is certainly not the case in our area. In fact, much of the pessimism in the consumers’ minds around the country has been driven by overly negative stories.

Fortunately, Minot and all of North Dakota for that matter is seeing positive economic indicators. Specifically, the Minot area is benefitting from the much discussed Bakken Formation and the recent news of additional personnel transferring into the Minot Air Force Base. Surely, with the number of people moving to the area, the real estate market will be impacted greatly. How does the average citizen in the Minot area prepare for such a market? What will be the short term impact? Most importantly, what will be the long term impact? Some facts must be established in order to prepare for an appreciating market in order to benefit long term.

A number of issues caused the volatile real estate market across the country, especially on the two coasts and in the metropolitan areas. In the past six years or so, those markets experienced unsustainable appreciation, extremely loose lending practices, interest only and adjustable rate mortgages, ‘house flipping’ (perpetuated by television shows of all things), new construction speculation and historically low interest rates. Those markets that were considered “hot” markets have now cooled back to reality. They will however, return to be strong markets….they always do.

Since real estate is always local, how does the Minot area fit into the current market. Of all the issues listed above that caused the volatile market, only low interest rates are prevailing in our local market. It is generally expected that the housing inventory levels will be low, causing a rise in housing prices and values. A number of things should be considered for property owners in our market. As in any market, sellers should prepare their home to return top dollar. Making minor (or major) repairs is extremely helpful in selling a home. Replacing outdated flooring and colors as well as cleaning the interior and exterior goes a long ways in producing top dollar. Marketing of the property is another important area to consider. A vast majority of potential buyers and investors in our market chose the internet as their best option for researching and purchasing decisions. A strong marketing campaign to expose a property to the buying public will be crucial. Finally, pricing the home, as always, will be the most important step in selling. Choosing an irrational price simply because it’s desired will not be justified by the typically required appraisal on the property. Underwriting practices has tightened in recent months and appraisers will be held to standards when preparing their reports.

From a buyer’s perspective, our market will require ready, willing and able buyers with credit approval letters from lenders. Buyers will find themselves in competition with other buyers and being prepared to make confident decisions will be necessary. Now, more than any other time in our market, being a prepared buyer means financially, emotionally, physically and represented by a quality buyer’s agent.

Minot should be excited for the upcoming growth of our community. Real estate will be a prime indicator of our economy and with low interest rates, sustainable growth and property values increasing, Minot is poised to see long term growth in the community.

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At the recent Prudential convention in New Orleans, Louisiana in March, our Prudential office of Minot was recognized with a national award.  Each year, Prudential tracks and monitors the ability of each office and their agents to successfully transact business online.  Prudential's exclusive Online Buyer Advantage allows for consumers to register their information and gain access to the system to set up portfolios and alerts on properties.  Out of the 400 offices in network nationwide, Minot can boast of having the highest success rate ever recorded in one year!  This is a testament to the highly trained agents and their ability to understand and meet consumer expectations online through building a trusting relationship.  We are proud to have such technologically skilled Realtors working at Prudential Preferred Properties of Minot! 

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This article will appear in the April issue of the Minot Daily Home Market Magazine:

The current real estate market nation-wide is experiences some bumps and bruises. There are many factors that allowed for this to happen, the least of which were heavy speculation, sub-prime mortgage borrowing, adjustable rate and interest only loans and plainly put, greed and/or uneducated borrowers. The housing market is a prime driver of the economy, so during this political year, the government is stepping in to try to relieve some of the pressure.

Three weeks ago, the Department of Housing and Urban Development (HUD) released new FHA and conforming loan limits as required by President Bush’s economic stimulus package. New loan limits will be calculated on local median home prices for many of the nation’s markets. The National Association of REALTORS® (NAR) expects the infusion of money into the capital market in this historically busy real estate season to help boost the economy and maintain extremely low interest rate levels. It is NAR’s position that nearly 138,000 home buyers will be brought to the market and up to 200,000 current home owners will remain in their homes on potential refinance situations.

An economic impact study performed in January by NAR shows even potentially stronger numbers, showing that upwards of 500,000 loans may be refinanced, saving over 200,000 loans from foreclosure. NAR estimates nearly 300,000 new home loans could be generated by these changes, which should stabilize home prices and keep mortgage interest rates in check with current levels. This information was reported to REALTORS® by NAR the first week of March.

There are a number of consumers that may be affected by such action. New loan limits in historically safe mortgage note instruments like FHA are better options than large jumbo loans with higher rates and fees. This option may allow current owners to maintain their homes and avoid foreclosure. New entrants to the market may be able to get favorable financing rather than using unconventional instruments to purchase the home of their dreams.

There are other steps that the government has considered, some of which would be helpful and some that may cause unintended consequences to the capital market. One positive move is the effort to license mortgage brokers going forward. However, if the government were to take steps to extend currently delinquent notes to avoid foreclosure, that may affect the current mortgage market in the way of higher interest rates and less inventory. Should the government intervene on already passed due notes, it could impact anybody going forward with a new mortgage.

How does all of this affect the Minot area market? It is generally understood that North Dakota as a whole has been left relatively unaffected by the volatility in the mortgage market. How this could help however is for FHA type financing, more buyers may be brought to the market and the ability of FHA to insure more loans in the national market should help stabilize interest rates and calm the irrational fears in the consumers’ mind.

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This is the beginning entry to blogging about our wonderful community, the city of Minot, North Dakota!  As a lifelong resident, two time graduate of Minot State University and an active member of the business community, I have a lot of positive and complimentary opinions of our city.  Most importantly, I am optomistic about the real estate market as the broker / owner of Prudential Preferred Properties.  Our company is the fastest growing, most aggressive internet marketing company not only in the Minot market, but in the state of North Dakota.  We are setting expectations high, beginning with this blog.  I'm looking forward to publishing as much relevant Minot city and real estate information and am anxious for your input! 

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