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Realtors, Ranchers Prepare for Oil Boom

Associated Press Follow
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  • 11 years ago
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BusinessRealtors, Ranchers Prepare for Oil BoomRealtors, Ranchers Prepare for Oil BoomThe Associated PressWith home prices dropping across the country, finding a boom town where prices are holding steady is a rarity. But these rocky hills and open farmland in North Dakota and Minnesota are bucking the national trend. (May 27)With home prices dropping across the country, finding a boom town where prices are holding steady is a rarity. But these rocky hills and open farmland in North Dakota and Minnesota are bucking the national trend. The reason? Location, location, location. A few billion barrels of oil under the surface doesn't hurt either. The U.S Geological Survey estimates that up to 4.3 billion barrels of crude can now be extracted from these hills, which sit atop the Bakken shale formation. Until recently, extracting the oil was cost-prohibitive. But thanks to the surge in oil prices and new horizontal drilling techniques, oil is starting to make its way to the surface. And for the housing industry, that means vertical growth. [Notes:SOT Scott Louser, Minot realtor]"WE SAW, JUST TO COMPARE APPLES TO APPLES, THE FIRST QUARTER OF '07 VERSUS THE FIRST QUARTER OF '08 OUT AVERAGE PRICE WAS UP ABOUT FIVER PERCENT. IN APRIL THAT PICKED UP SUBSTANTIALLY. SO, WE ARE GOING TO SEE SOME REAL HEALTHY APPRECIATION THROUGH '08 AND I ALSO THINK THROUGH '09, JUST BECAUSE THE AMOUNT OF BUILDING THAT IS GOING TO TAKE PLACE AT THE END OF THIS YEAR THE BEGINNING OF NEXT YEAR. WE COULD SEE DOUBLE DIGIT APPRECIATION." And while many property owners don't own the mineral rights to their land, they do expect to see economic benefits from the boom in the form of services their land will provide to the oil companies. [Notes:Gene Harris, North Dakota rancher]"THIS WILL PROVIDE ANOTHER GENERATIONAL TURNOVER OF FAMILY FARMS AND RANCHES. BECAUSE OF THE INCREASE IN INCOME THAT SO MANY PEOPLE ARE GOING TO PARTICIPATE IN." .Even without the oil boom, realtors say the property in the region is holding its value well in the face of a national decline. Scott Louser, Minot realtor "WE HAVE CONSERVATIVE HOMEOWNERS THAT DON'T SPECULATE, THAT DON'T FLIP HOUSES, THAT DON'T BORROW ON INTEREST ONLY AND ADJUSTABLE RATE MORTGAGES WITH THE ANTICIPATION OF STRONG GROWTH IN THE FUTURE. THAT TYPE OF THING OF THING JUST HASN'T HAPPENED IN OUR MARKET." Whether that conservative streak continues is anyone's guess. The Petroleum Council says the North Dakota oil industry needs to hire nearly 12,000 new employees by 2010 to keep up with growth. That means new homes like these will likely be in as much demand as the oil they sit atop of. ___ ___, The Associated Press.(****END****)
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