If you are interested in buying a home in the oil patch communities in western North Dakota, you’re not alone. Many people have ended up in this region due to the abundance of high-paying jobs in the Bakken formation, where jobs surrounding the oil and gas industry have dominated the economy over the past few years.
When the boom first occurred, there weren’t enough places for all the new residents to live, so temporary lodging, also known as “man camps,” sprang up on vacant hillsides. Today, the early bustling days have subsided somewhat, and a more stable norm has settled in. Instead of people flocking to the area to seek their fortunes, workers are bringing their families to Williston and the surrounding areas to make them their hometowns. Here are some considerations to ponder if you’re eyeing neighborhoods in the western region of North Dakota.
Draws of an oil patch community
Oil patch towns may have expanded rapidly over the last five years during early days of drilling, but today they are maturing into slower-paced cities with more livable places. Relatively undeveloped towns that originally relied on temporary living quarters for residents, such as trailers and modular buildings, have grown their infrastructures around the population. For example, in Williston, a new 70-million-dollar high school, a 68-million-dollar recreation center and expansive water and sewer treatment plants have sprung up. Western North Dakota has also become a home to countless new businesses offering in-demand products and services. Watford City, in the heart of the oil patch, is now home to a brewery, a business you typically would only see in a larger city. If you like small-town living with city amenities, these communities could be a fit for you.
North Dakota has more than just oil
Oil is not the only industry in North Dakota. Because of its rich soil, this state has a long and proud agricultural history. North Dakota farmers grow barley, durum wheat, oats, hard red spring wheat, buckwheat, canola and corn. In fact, they produce more cereal grains than any other state in the nation. The farmers also lead in the country in their production of oilseeds, sugar beets and lentils. In eastern North Dakota, many of the residents work in healthcare, education, tech and transportation. The state has scores of hospitals, clinics, nursing homes, public universities and colleges, not to mention five airports, multiple railroads and bus routes connecting a network of communities across the state.
Any time a homebuyer purchases a house, he or she will have to think long-term. In an industry such as oil that ebbs and flows with demand, it is important to consider whether your employment is likely to be a short-term opportunity or whether you plan to stay with the industry as it evolves over time. Because mortgages are often 30-year loans, it’s important to make a long-term plan before investing in a house. Even though oil prices have dropped, government officials in the oil patch towns say they aren’t worried about a less bustling economy, because they know where the oil is and they harvest it like it’s money in the bank. Unemployment in the region is still very low, and most companies are hiring with long-term investments in their employees in mind, too.
How long should you own your home before selling it?
Before you buy a home, give some thought to how long you plan to stay in it. The general rule of thumb is to remain at that address for five years. Pulling up stakes before that could cost you money in several ways, including these key items:
- Closing Costs: When you close on a loan as either a buyer or seller, there are costs involved. The amounts for each party vary depending on the deal made between a buyer and seller, but the number can add up to thousands of dollars.
- Interest vs. Principal: In the early years of a loan, much of your monthly payment will be going toward interest rather than the principal balance, especially with a 30-year loan. Although you’ve been paying X amount every month, only a small percentage of it is actually paying off the loan balance. Take a look at an amortization schedule of your loan to understand your own loan’s specifics.
Who should you work with as realtor and lender?
The realtor and lender you work with to find your home and obtain a mortgage will make a difference in your home buying experience. Be sure to get referrals, interview professionals to make sure you feel comfortable with each other. Be sure to talk to the lender about the different kinds of loans that are available.
Valley Mortgage, Inc. has lending professionals who are well acquainted with North Dakota’s diverse and changing economy, including the housing market in all regions of the state. If you want to put down roots in one of the oil patch communities, they’ll will work with you to find the right loan for your situation. To speak to a mortgage professional, call 701-461-8450.