Pandemic surge in housing demand hits Grand Forks and beyond
Data from the Grand Forks Association of Realtors shows that the average home sale price moved from about $245,000 in 2020 to $259,000 during 2021, up about 5.7%.
GRAND FORKS — It’s been a wild 18 months in the real estate market — buoyed by low interest rates and supercharged by a pandemic — and Grand Forks realtor Zach Finney says the upper Midwest is no exception.
He’s seen expensive houses, previously unsellable, find buyers at new highs. He’s seen buyers waive inspections. He’s seen “escalation clauses,” which let a buyer make a bid, then pay even more to outspend the competition. Normally, January might be a lull for home sales; but personally, he said, market activity is as strong as he’s ever seen it.
“This time of year, we’ve got a shortage of listings,” said Finney, of Greenberg Realty. “As a result, the prices are continuing to go up. I think in the long term, if you look at the predicted rate increase, I think that prices could stabilize and eventually come down.”
“I don’t think there’s going to be a crash, personally, but maybe a small adjustment,” he said.
That’s a testament to the staying power of one of the biggest surges in real estate prices in recent history. The New York Times reports that roughly 80% of American metro areas saw price increases of more than 10% during 2021, the highest since at least the early 1990s. In Fargo, prices are up more than 12% between the third quarter of 2020 and 2021, according to the National Association of Realtors , and up 11.5% in the Twin Cities.
Price surges haven’t been so significant everywhere. The NAR puts Bismarck’s price increase closer to 5.9%. And though the NAR doesn’t include Grand Forks in its top-line metro data, most available data shows that its price gains were more muted — closer to Bismarck than to Fargo.
To wit: the real estate website Zillow rates Grand Forks’ housing market price increase at 8.7%. Data from the Grand Forks Association of Realtors shows that the average home sale price moved from about $245,000 in 2020 to $259,000 during 2021, up about 5.7%.
But brokers say that, whatever the increases are on paper, Grand Forks housing is in a heated seller’s market. Laurie Tweten, broker-owner of Coldwell Banker Forks Real Estate, said it’s been a remarkable two years of sales.
“Due to the demand and the low interest rate, we have had two of our best years ever in real estate — in my company, anyway,” she said. “Demand for single-family houses is still very high. My husband builds homes, and is still getting many, many requests for custom homes to be built. The issue he is dealing with right now is supply chain and cost of materials, which went up significantly during this pandemic season.”
That can be a big burden for builders of all stripes. According to the Federal Reserve Bank of St. Louis, building materials and supplies prices are far ahead of where they were at the start of the pandemic, but have come down from a mid-2021 spike.
But Laurie’s husband, Cameron Tweten, said it has not outweighing demand. When he took a call from a reporter this week, he was at a job site for his company, Village Homes — with all the clanging and grinding sounds of hard work in the background.
“The last two years I did 15 houses each year, which is the most I ever did,” he said. “I think the market is fantastic.”
And building records seem to agree. There were 99 new single-family homes permitted in 2021, more than 2020 or 2019 — and once you add the 47 new townhouse permits, it was a banner year for residential building, with the total of those two categories the highest since 2015.
It’s hard to know what happens next. Will the market cool soon? Interest rates are rising, with the Federal Reserve already putting them back at pre-pandemic levels. But at about 3.55% for a 30-year mortgage, they’re still historically low. Michael McFarlane of Oxford Realty doesn’t have a crystal ball.
“We might just be back to where we were a few years ago,” he said, “and that wasn’t so bad.”