(Part 4) High demand for housing and low demand results in steep prices
The boom in the oil industry has caused a shortage in housing in North Dakota. The result? In the last few years, home prices have surged. In 2013, homes in North Dakota sold for over $200,000, up from the average price of just over $160,000 in 2011.
It is not just the houses that have become more expensive; home rental prices went up as well as is what is common when demand outweighs supply. According to online reports, apartments in the heart of the oil patches cost as much as apartments in cities like New York and Los Angeles.
While apartments used to cost below $500 just several years ago, they now cost closer to $2,000. Apartments in the heart of oil industry have breached the $2,000 price. Parking for trailer homes could go for over $800 a month. Room rates at hotels rival prices of hotels in cities like New York.
Part of the reason housing is so expensive in the region is because local governments are also cautions about residential planning and financing. There are few lands that are ready for development. Some home builders are not ramping up construction because of the lack of public infrastructure to support the housing. Construction cost is also very high because building supplies come from out of state.
Terry Smeader
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