Home values rise in North Dakota as inventory decreases

Grand Forks City Administrator Todd Feland said he’s hopeful more development in the city’s deep south end will soon open up more housing stock.

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Emily Contreras leads the Grand Forks Community Land Trust. "I think it's been at least probably three years now that the affordable market, which I generally consider to be something in the range of $200,000 or less, is virtually nonexistent," she said of Grand Forks.
Eric Hylden/Grand Forks Herald

GRAND FORKS — Realtor Tim Bernhardt said Grand Forks didn’t have it nearly as bad as other cities — the places where mid-pandemic home prices truly surged.

He’d hear stories about places like Montana or California or even urban Minnesota, where a rush of buyers drove prices to extraordinary heights. Grand Forks, he said, was more fortunate, more “conservative,” than those extremes.

“You’d hear stories where prices had shot up 50% to 100%, and people were waiving inspections, and there was just oodles of cash buyers,” said Bernhardt, who works with Crary Real Estate.

But Grand Forks and much of the rest of North Dakota has still seen significant price growth in recent years. According to figures from the Federal Housing Finance Agency, housing prices in the third quarter of 2022 were more than 22% higher than early 2020, part of a statewide trend that saw many North Dakotans’ home values jump.

Those changes came as buyers have piled into the housing market, enticed by historically low interest rates and potentially driven, too, by lockdowns that left some families cooped up and looking for more space. The result was, in many American communities, an extraordinary explosion in the cost of a home. One FHFA index shows that, across the nation, housing prices grew by more than 42% from late 2019 to late last year.


The enormous surge in prices has intensified a headache for local and state leaders, who have long sought to bring more workers to North Dakota. In many communities, it’s a marquee economic issue.

“Part of that right now is, I think we’re struggling on inventory,” Bernhardt said. “We already had relatively low inventory, and then building is going to suffer because materials are so much more expensive. You’re going to have less builders that are less willing to risk putting up spec houses.”

Mike Opp, a broker and owner at Oxford Realty, pointed out that wage inflation is helping to take a bite out of the big jump in housing prices. He noted that rising interest rates, which are cooling the market , could help drive down costs.

“I don't think that we're out of whack or anything. I think that we're maybe, you know, a little bit higher than we should be because the demand is outstripping the supply a little bit,” he said.

But after years of shifts in the housing market, the least wealthy North Dakotans are often left with few options. Emily Contreras, executive director of the Grand Forks Community Land Trust, said there really aren’t many opportunities in homeownership for them in Grand Forks.

“I think it’s been at least probably three years now that the affordable market, which I generally consider to be something in the range of $200,000 or less, is virtually nonexistent,” she said. “There are very few homes priced at or below that level that wouldn’t require basically immediate, substantial rehabilitation.”

Terry Hanson, executive director of the Grand Forks Housing Authority, pointed out that apartment vacancy rates have tumbled in the last year – a potential symptom of home buyers getting priced out of the market. That, in turn, drives demand for apartments, which makes the cost of housing go up for renters, too.

“Rent has gone up and home prices have gone up and you can’t get things built,” Hanson said.


Housing costs have bedeviled Grand Forks leaders for years, with then-Mayor Mike Brown launching his “blue ribbon” commission on housing more than 10 years ago. It’s been a marquee city issue ever since. But despite City Hall efforts, a more affordable market has remained elusive.

City Administrator Todd Feland said he’s hopeful more development in the city’s deep south end will soon open up more housing stock. City Hall has chipped away at the costs that developers often face when they build new homes, he said — policy changes that can help support more home construction and hopefully make it more affordable.

Mayor Brandon Bochenski ran on a platform that acknowledged Grand Forks’ tight housing market, with one notable idea that the city might create a $10,000 down-payment assistance program. Bochenski recalled in an interview this month that an early plan toward implementation didn’t get City Council support.

A key part of the solution now, Bochenski said, is building Grand Forks’ brand as a vibrant community.

“Having a community that's growing is going to give confidence in the private sector to build,” he said.

There’s also a proposal working through the Legislature to weigh the Bank of North Dakota’s role. One bill — co-sponsored in part by Reps. Claire Cory and Emily O’Brien, both of whom are Grand Forks Republicans — would create a study of a potential “interest rate buydown program” that could save homeowners interest payments on their primary residence.

That plan has drawn Bochenski’s interest, he said, since he’d heard about it through North Dakota mayors and the state’s League of Cities. Ideally, it could help bring more workers to North Dakota.

Part of the problem is that housing is a difficult problem to solve from City Hall – it’s a local market, but it’s often buffeted by national forces that deeply complicate leaders’ ability to quickly make more housing more affordable. Contreras, the community land trust director, said there are more direct local approaches available, but they’re often very expensive.


“It's either a short-term influx of funds, and then you have to deal with the changes later when you don't have that money available anymore,” she added. “Or it's a long-term commitment to funding. And then that's a significant, presumably, tax implication where it's increasing tax dollars.”

And housing issues can be especially pressing for rural areas of North Dakota, where supply can be particularly scarce. And rural communities’ plight can often highlight how many essential needs — from housing to child care — can rebound back onto the ability to build a workforce.

“I remember having a conversation in Garrison where they wanted to hire an additional police officer, but where does that police officer stay?” said Matt Gardner, executive director for the North Dakota League of Cities.

“When people like that come to the town, you want to be able to have a house and bring their family,” he said. “Their wife or their spouse can come work at the bank or wherever. I mean, these small towns need families.”

Sam Easter is a freelance reporter who has been a regular contributor to the Herald since 2019. He covers a variety of topics, including government and politics.

In 2015, he joined the Herald’s staff as City Hall reporter, covering North Dakota politics at all levels and conducting Herald investigations through early 2018, when he began his freelancing career.

Easter can be reached at or via Twitter via @samkweaster.
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