By Gerry Gilmour
New Century Press
Favorable weather and low interest rates have combined to keep hammers swinging as we enter a new building year in the Red River Valley.
Total construction in Fargo-Moorhead actually increased, by 11 percent, or $37 million, in 2011, compared to 2010, despite the lingering national recession and continuation of housing foreclosures.
In Grand Forks-East Grand Forks in the northern valley, commercial building has been stronger than residential, according to builder Jerry Green. The owner of Green’s Quality Construction has been in the business for 38 years.
Green said he cut back his housing construction in 2011 to focus on building the Ho Sports Bar and Casino on the old Westward Ho site along U.S. Highway 2 in Grand Forks. The project encompasses 6,800 square feet and will include an additional 3,000-square-foot ballroom for weddings and other large events.
Green expects housing starts will pick up in 2012, but worries that rising fuel costs will raise the price of building homes. “There’s still a lot of people here worried about the economy,” Green said.
The city of Grand Forks issued 1,480 building permits in 2011, at a total value of $144 million. That compares to 1,682 permits in 2010 with a value of $82 million.
Total housing starts in Fargo-Moorhead, which encompasses both West Fargo and Dilworth, were down slightly, mostly due to fewer twin-home starts, according to the Home Builders Association of Fargo Moorhead. (See accompanying graphic).
The steadiest pace in metro Fargo-Moorhead has been set by West Fargo. The city, just short of 15,000 citizens a decade ago, today is home to an estimated 26,000, according to Mayor Rich Mattern. While his local sister cities have seen housing numbers rise and fall, West Fargo marched along with 214 in 2009, 198 in 2010 and 210 in 2011.
“Most of it is going south of the Interstate, with the Veteran’s Boulevard overpass,” Mattern said. “Shadow Wood is going great guns, and so is Osgood.”
West Fargo has gone from too few available lots to a healthy supply of between 800 and 900, Mattern said. And with a new elementary school and high school coming, “they’ll keep coming,” the mayor predicts.
He acknowledges, too, that West Fargo benefits from uncertainty about flooding, a proposed, but unfunded, diversion, and flood insurance in the city of Fargo. The Sheyenne Diversion proved its worth first in 1997 and again in subsequent floods, he said.
Terry Becker, HBA president this year, is among 50,000 attendees in Orlando, Fla., this week for the NHBA International Builders Show. Becker, a builder and millwork and cabinetry supplier since 1991, said a Fargo-Moorhead builders are faring better than their brethren in other parts of the country.
“It’s been 10 to 12 years since my guys have had a layoff of any type,” he said from Orlando. “Our local numbers reflect a slowdown, but for the most part, things are pretty good in our area. It appears we’re holding our own in Fargo-Moorhead and for that matter North Dakota in general. ”
National trends are moving toward “green,” energy-efficient homes and toward smaller homes with fewer rooms “but all the amenities. We’ve already been building ‘green’ just because of our climates.”
Jay Hass, vice president of FM Mortgage Corp., said refinancing of homes remains a hot line of business because of historic low interest rates. “But we’re doing a lot of purchases, too, because home prices have come down. People were scared of the so-called recession, but they’ve held onto their jobs.”
Rates for a 30-year mortgage range from 3.875 to 4.5 percent. Shorter-term loans go lower. “That’s unheard of for that amount of time.”
The apartment vacancy rate for December 2011 was at 4.3 percent, its lowest rate in years.
Becker pointed out that our community is doing well compared to others, but it could be doing much better. “It is time to act swiftly to provide permanent flood protection that allows our community to grow and create jobs. Just because it’s drier this year doesn’t mean permanent flood protection isn’t needed. It is not just a yearly goal. A long-term plan needed.”