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Bankers can control it though and they should, as it is in there best interest. Look, unless people have a couple of hundred thousand dollars on hand they're most likely going to need a loan. Now people are feel to ask anything they want for a house, it is the banks responsibility to have it appraised and only loan money based on what is worth. A current owner is free to ask $300k for his 2 bedroom dump, and he may well find some foolish smuck to pay that much for it, but the bank should only offer to cover what they think they can get back if the new owner walks away. Banks did try and do this at the start of the southern housing boom, but they were undercut by lenders willing to give second mortgages. I doubt that same madness will repeat itself in western ND.
If the lenders are local banks and credit unions, I don't think you will find excessive leveraging here in North Dakota. Most of the problems seem to have come about from the big banks (Citibank, Bank of America, Wells Fargo and Chase). These banks sold most of the first loans off to the GSEs (Fannie and Freddie) and the tax payers got stuck with the walkaways, defaults, foreclosures and short sales.
I don't believe that most of the second mortgages could be sold off. The big banks likely had to eat those.
I don't even know if any of those big banks have a presence here in North Dakota. Where I came from, they had branches everywhere.
I for one won't ever deal with those big banks again. I have a checking and savings account with a local credit union and am quite happy to not have to worry about nickel and dime fees.
I hear you, we are all sort of correct. My husband and I have not used realtors in years. Our last three house sales were by owner, whether buying or selling. And, I agree, the banks will only lend so much, often depending on appraisal. But, I have heard that there are quite a few folks, company owners, etc. paying cash. Some willing to pay the high rent prices, which I feel is at least one reason why the rent has sky rocketed there. Greed, availability, desperation....Yep, the cost of housing has gone up in Williston. Here is what I would do....invest some of that money in a property, even a dump, make improvements as needed, rent out rooms if you're a single guy/gal. Make someone else pay your mortgage. You'd have the benefits of knowing that you have a roof over your head while you work the fields, and passive income from renters. One sure thing, you know there are no shortages of folks that would want to rent. Win, win at least in my opinion.
They will try to keep the price from running to far ahead of what people can pay. The country is in a nasty financial bind and a lot of it was caused because banks loaned money on houses, knowing fully well the owners couldn't afford it and would upside down for 30 years. So they'll try and hold it back some just so it's not rediculously high. 1) they'd get back into the same bind they are trying to crawl out of, 2) nobody could afford, so houses wouldn't move when put up for sale. They'd be sitting.
Now, having said that, they try, but they don't completely succeed.
Short of some legislative action holding prices down (which would never happen for buying though it does happen for renting), it is completely beyond their control to affect the price of housing.
Loaning money on houses to people who can't afford it doesn't affect the pricing per se, that (loaning money) is a secondary effect to many other policies that came in to play in the first place (like artificially low interest rates, gov't subsidized loans, no "red-lining" etc.) that caused the banks (and other lenders) to make money easily available to nearly everyone. And I should add those and other related policies were initially responsible for the recently popped real estate bubble in many parts of America.
Last edited by internationalman; 11-22-2011 at 12:40 PM..
I hear you, we are all sort of correct. My husband and I have not used realtors in years. Our last three house sales were by owner, whether buying or selling. And, I agree, the banks will only lend so much, often depending on appraisal. But, I have heard that there are quite a few folks, company owners, etc. paying cash. Some willing to pay the high rent prices, which I feel is at least one reason why the rent has sky rocketed there. Greed, availability, desperation....Yep, the cost of housing has gone up in Williston. Here is what I would do....invest some of that money in a property, even a dump, make improvements as needed, rent out rooms if you're a single guy/gal. Make someone else pay your mortgage. You'd have the benefits of knowing that you have a roof over your head while you work the fields, and passive income from renters. One sure thing, you know there are no shortages of folks that would want to rent. Win, win at least in my opinion.
When demand outstrips supply, short of gov't intervention, prices will always go up. It is the way the market "clears" inventory using the price mechanism. If there is a legitimate profit opportunity other entrepreneurs will see it and get involved, increasing the supply and causing prices ultimately to drop as the inventory catches up with the demand.
When supply is artificially limited through political actions or increased regulations, which is the case in Williston and nearly all "boom" areas, prices (both purchase and rental) will ratchet up even higher and take longer to come down.
Great ideas by the way. My housing is being provided by a oil worker who bought a home in Williston and is leasing out the other rooms. His mortgage is more than covered and he probably gets a housing allowance as well, increasing his net take home pay.
When I moved here in 05 I could have bought a 3bed 2 bath for around 70k. That same house is now 150-180k. Even the houses outside of Williston have shot up in price, despite the best efforts of the banks and appraisers to keep values down.
Are you sorta kickin yourself for not buying it? Would you advise the more recent oil field folks to invest? It might be some good insight.
Are you sorta kickin yourself for not buying it? Would you advise the more recent oil field folks to invest? It might be some good insight.
I am sort of mad at myself for not buying then. But at the time I only was making 25k working for the county so it would have been a stretch anyway. And I was young enough to not be committed to staying here. Then I met a girl and ended up with a couple of kids and needing to get out of my one bedroom apt in the middle of this boom lol. Life is funny that way sometimes.... Took me two years and five appraisal fees before I finally bought from someone willing to come down to appraised value. Everyone else walked away and sold for more.
I am sort of mad at myself for not buying then. But at the time I only was making 25k working for the county so it would have been a stretch anyway. And I was young enough to not be committed to staying here. Then I met a girl and ended up with a couple of kids and needing to get out of my one bedroom apt in the middle of this boom lol. Life is funny that way sometimes.... Took me two years and five appraisal fees before I finally bought from someone willing to come down to appraised value. Everyone else walked away and sold for more.
Good for you. I am very interested in postings from someone w/ actual firsthand info. I came here to this forum because I do still own my home there, even though we live in the eastern part of N.D. I am learning valuable insights about the living conditions there, hoping to decide whether to continue to hang on to my home, which was to be our retirement home, or bail. Thanks for your insightful postings.
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. Took me two years and five appraisal fees before I finally bought from someone willing to come down to appraised value. Everyone else walked away and sold for more.
