BISMARCK, N.D. (AP) - Homeowners in California or Florida may be hurting, but in North Dakota, you can still sell a house for more than you bought it and get a favorable loan, too.
While home sales are slumping nationwide, North Dakotans are finding buyers -- even in the winter. The state has managed to duck the worst of the housing crunch thanks to a strong local economy and conservative lending that avoided the worst excesses of the mortgage market bubble.
'One of the reasons I live in North Dakota is that we have a stable economy and a stable real estate market,' said Kris Sheridan, a Fargo real estate agent. 'We may be freezing to death today, but we're not having the tough times like everyone else in the country.'
Sheridan said more interested home buyers are popping up after the Federal Reserve cut a key interest rate. The Federal Reserve sliced rates by a half percentage point Wednesday, following another cut of three-fourths of a point a week earlier.
'It's just frosting on the cake for people in this part of the world,' she said.
North Dakota's largest cities, Fargo and Bismarck, are seeing healthy housing sales. The National Association of Realtors ranked Bismarck as the No. 1 area in the country in percentage increase in the value of existing single-family homes, and Fargo was 24th. The median sales price of a single family home in the Bismarck area for the last quarter of 2007 was $161,600, a 15 percent increase. The median price in Fargo area was $145,700, a 6 percent jump.
Aaron and Sarah Gunderson put their Fargo home on the market because they needed more space for their family with four children. The four-bedroom, two-bath house, built in 1989, sits among about a dozen similar looking homes on a quiet street closed off by a cul-de-sac.
The Gundersons sold the house in October, after six weeks and one price drop, for about $135,000. Aaron Gunderson said it actually took a little longer than he expected.
'The average time for houses to sell in my neighborhood was about three weeks,' he said.
Sales of pre-existing single-family homes in the Fargo area increased 4.1 percent last year, to 2,707 from 2,600 homes in 2006, said Brenda Martinson, president of the Fargo-Moorhead Area Association of Realtors.
Experts credit the healthy housing market on a strong local economy, the lowest rate of subprime loans in the country and the spirit of George Bailey, the friendly hometown banker played by Jimmy Stewart in 'It's a Wonderful Life.'
A Mortgage Bankers Association survey shows only 2.7 percent of the 2007 mortgages in North Dakota were classified as subprime -- loans made to people with limited or sketchy credit histories that typically have a higher interest rate based on a higher risk.
Robert Denk, a senior analyst and forecaster for the National Association of Realtors, said that is the lowest rate in the country.
'Everyone expects a large share of these loans to go bad eventually,' Denk said. 'The discussion tends to be about who has the most or least of these time bombs, and when they'll go off.'
Nationwide, subprime loans increased to 6 1/2 percent of all mortgage loans in 2006 from 1 percent in 2000, Denk said. In North Dakota, subprime loans have gone to 2.7 percent of all loans in 2006, up from 0.2 percent in 2000.
Denk said one calming influence in North Dakota is what he calls the George Bailey model of banking.
'North Dakota has more conservative values than Miami or New York City. The local bankers know the people they're making the loan to. They're less inclined to give the loans to people who shouldn't get them,' Denk said.
'There's no law that says you can't give a loan to someone with bad credit,' said Tim Karsky, the state banking commissioner. 'I believe to a certain extent, the conservative nature of the people has really slowed down the (subprime) process here.'
North Dakota also has avoided the peaks and valleys of home values in the rest of the country, said Ray Perhus, a senior vice president for Valley Mortgage Inc. in Fargo.
'Places like Chicago and Minneapolis were seeing 10 to 15 percent appreciation every year before the bottom fell out,' Perhus said. 'Since we don't have the wild fluctuations in appreciation, we don't have as many people chasing those subprime loans.'
In places like Florida, California, Las Vegas and Phoenix, many of the subprime loans were taken out by speculators who bought houses to improve them and sell for a profit, Denk said.
'North Dakota was less exposed to these sort of pressures, these sort of influences,' Denk said.
North Dakota's economy has stayed strong, helped by oil development and a strong Canadian dollar that has brought more people across the border to shop.
'A lot of the sectors that we're heavily depending on, they're doing well,' said Brian Walters, president of the Greater Fargo Moorhead Economic Development Corp. 'Manufacturing, particularly farm equipment, is going through the ceiling and energy is strong in western North Dakota.
'We're enjoying good times right now,' he said. 'It's reflected in the housing market.'
Indeed, Fran and Jon Joersz expected the sale of their Bismarck house to take longer than it did.
They put the house -- built in 1910, featuring stained glass windows and artistic woodwork -- on the market in October. They won't reveal the selling price, but say they got an offer they liked in December.
'Everybody said 'You're nuts, why don't you wait until spring?'' Fran Joersz said. 'I thought it would take a little longer to sell.'
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