Thanks to plenty of jobs and plenty of oil money, many North Dakotans are making good on the dream of owning a vacation home down south. And Arizona, where real estate prices are at rock-bottom and the weather is far balmier than in North Dakota, is looking like a really good deal. With unemployment numbers at 3.4 percent in North Dakota and a serious shortage of available real estate, many would-be buyers are selling their own homes at a premium and then moving into Arizona mansions with the profits[1]. “A lot of people have struck it rich,” explains one real estate agent who credits oil companies for much of the new money as they are “coming in and buying business and land…at the peak.” And for homeowners not directly tied to the oil industry, the windfall means that they can move somewhere warmer where the real estate market is ripe for deal-hunters and ply their trade there. Others are opting to commute from more than a thousand miles away in order to enjoy better weather and the proceeds from the sales of their homes.
North Dakota started out 2012 with a budget surplus of $800 million thanks to thousands of new oil wells that have been erected since 2010[2]. There are presently about 200 rigs drilling new wells in the state, and it is producing about 500,000 barrels of oil a day. As a result of the many employment opportunities, the infusion of cash from oil companies buying up land and the real estate boom resulting from thousands of workers moving to the state along with their families, retailers are reporting triple-digit growth and even a shortage of workers. In fact, some mall food courts are unable to open until high school students get out of class, says director of the University of North Dakota Bureau of Business and Economic Research David Flynn.
Do you think that Arizona’s market might improve significantly as a result of North Dakota’s newfound prosperity?
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[1] http://www.usatoday.com/news/nation/story/2012-01-02/North-Dakota-Arizona/52344394/1
[2] http://minnesota.publicradio.org/display/web/2012/01/02/north-dakota-oil-economy/
Lets hope so. . .
They should enjoy it while they can. Arizona will run out of water within 10 years. Never move somewhere that won’t have enough water in the future. You have much bigger problems than just real estate values…
In my opinion, this boom will not rescue the mess in Arizona. There are other markets, such as Florida, and the Southeast that will gain some of the benefit. Also, as mentioned in a previous post by another reader, Arizona faces a huge water resource problem. All in all, probably not a good idea to invest in a major property in Arizona.