By Jamee Larson
Construction figures and home prices are often a strong measure of the strength of the economy. Although both the local and national economy has seen a sharp recession since 2007, industry officials are forecasting a slow but steady recovery for the housing market in 2013. Local executives are equally optimistic about the future of housing and development in the Red River Valley.
According to the 2010 U.S. Census Report, the population of the F/M Metropolitan area was 173,465 people (Fargo 105,549, Moorhead 38,065, West Fargo 25,830, and Dilworth 4,024). When compared to figures from 2000, the growth rate within the metro area is quite remarkable. Since 2000, Fargo added 14,950 residents (an increase of 16.5%), Moorhead grew by 5,888 (up 18.3%), and West Fargo flourished with an influx of 10,890 people, a whopping 72.9% increase. All indicators appear to predict a similar population rise in the future. With a substantial growth in population, however, comes an obvious increased need for affordable, quality housing.
How has the recession affected housing and development in the region?
Overall, the F/M area has seen the same, if not better, recovery as other metropolitan areas across the nation. Darrick Guthmiller, President of the Home Builder’s Association of Fargo-Moorhead and Manager of Kochmann Brothers’ Homes, Inc. explained the recession and recovery process in Fargo/Moorhead. “The 2012 year-end permit report was the best overall that we have seen since before 2008 when the nation began experiencing a down economy and F-M was flooding regularly,” Guthmiller said. “Last year, our total housing stats were back up to 2006-2007 levels. That is due to the great opportunities we have by living in stable communities and by consumers taking advantage of low interest rates.
The HBA of F-M’s 2012 report also indicated a 34% increase in the total value of all construction activity to $195 million. Total housing construction value went up by 38%.
The Fargo Moorhead Area Association of Relators reported similar increases regarding the sale of existing homes:
FM Metro Closed Housing Sales: (Single Family, Twinhomes, Townhomes, Condos)
2012 2011 2010
Fargo 1,514 1,175 1,247
Moorhead 575 464 473
West Fargo 622 450 460
Dilworth 45 37 41
Unfortunately, 2013 is off to a bit of a slow start, mostly due to weather related concerns. “Our first quarter permit for 2013 report was just finalized and shows a bit of a lag in building permit numbers compared to last year,” Guthmiller said, “ mostly due to our late building season start.” Weather aside, however, all indicators point towards a equally successful housing market for 2013, especially now that winter is finally behind us.
Lisa Vatnsdal, Community Development Division Manager for the City of Moorhead also talked about the current economic climate in the region. “The FM Community was affected by the national recession,” Vatnsdal said, “but to a lesser degree than most other areas of the country due to a diverse economy and sound lending practices in our region.” Vatnsdal stated that the demands for multifamily building has increased, and attached single-family homes are in demand by active seniors and small households. “We expect building activity to increase to meet the demands of population growth,” she remarked.
According to Vatnsdal, the City of Moorhead is working hard on redevelopment, citing that as one of Moorhead’s primary focuses. “We are working together with a development proposal for additional student housing plus some commercial development on First Avenue North on a site that used to be industrial.”
Overall, Moorhead is focused on becoming an active and vibrant community to not only attract new residents, but also retain those already there. “The City of Moorhead has positioned itself as ‘your hometown within the metro’ with strong residential neighborhoods, strong educational system including a single high school, and great recreation options,” Vatnsdal said. “Combined with the flood protection work the city has done and building lots that are outside the 100-year flood plain, we have a great story to tell and we’re working hard to get the word out to prospective homebuyers and housing stakeholders to GROW MOORHEAD!”
What is the future of housing and development in the region?
According to the North Dakota Housing Finance Authority, North Dakota’s communities face several housing challenges as the state looks towards the future:
The housing stock in many communities is aging. Housing, both single- and multi-family, is in need of rehabilitation or replacement in many communities.
Energy development areas are struggling to balance adequate housing needs with long-term sustainability of development.
North Dakota is facing an increased elderly population over the next ten years.
Many of North Dakota’s small towns are seeing shrinking populations as people migrate to bigger communities not only for job opportunities and more services but also for adequate housing.
That does not mean, however, that the future is bleak. In fact, housing market projections are favorable for the F/M/ area, based in part on opportunities and incentives that are currently in place throughout the Red River Valley.
According to Guthmiller, consumers are taking advantage of the opportunities here to buy or build, including:
Low interest rates
• Wide variety of houses and developments
• House values are steady locally
• Buying a home is a great investment (the American Dream)
• Local banks have money to lend
Housing incentives
“When buying or building a new home you can save potentially over $5,000 in Fargo and West Fargo,” Guthmiller said. “Moorhead and Dilworth recently added a two-year property tax rebate on newly built homes as well,” adding that there are also incentives for down payment, closing cost, and financing assistance.
For more information on housing and development in the F/M area, check out the following websites:
City of Fargo: www.ci.fargo.nd.us
City of Moorhead: www.ci.moorhead.mn.us
City of West Fargo: www.westfargo.nd.gov
City of Dilworth: www.dilworthcity.mn.com