1

Region VI Phase I Housing Findings

Presented to:  South Central Dakota Regional Council

Presented by:  Maxfield Research Inc. 

February 15, 2013

Agenda │ Processes

• Maxfield Research Overview

• Project Scope

• Phase I & Phase II Overview

• Methodology and Sources Used

• Demographic Findings

• Employment

• Housing Characteristics

• For‐Sale Housing

• Rental Housing

• Senior Housing 

• Phase I Demand Summary

• Housing Affordability

• Challenges

• Opportunities

• Next Steps

• Questions

Agenda | Processes

2

• 30 years of experience

• Market experts in all real estate/land 

use types

• Diverse clientele

• Work closely with governmental 

agencies 

• Customized work programs

• Detailed recommendations

• Objective analysis

Real Estate 

Research & Consulting

Maxfield Research Inc.

Objective

Custom‐built studies based on the needs of Region VI

Provide custom comprehensive housing study

ApproachIdentify current & future housing needs for residents in Region VI and provide framework for meeting housing needs

OutcomeResearch and analysis will provide decision makers with an objective overview of housing conditions for existing and future residents

Key Recommendations• Short and long-term housing needs• Recommendations guiding future housing development• Tools/policies to implement the plan

Deliverables

Key study checkpoints• Phase I complete (January 2013)• Phase II ongoing• Final: TBD

Project Scope

3

Phase I Phase II

Phase I & Phase II

• High‐level assessment

• Review of 2012 ND Statewide Housing Needs Assessment

• Initial Findings based on:• Demographic/economic 

projections• Household characteristics• Building permits, etc.

• Demand by housing type to 2020

• Refine Phase I findings

• In progress (Spring 2013)

• Field work & Interviews, Interviews, Interviews…

• Detailed recommendations by County/Submarket• Product types, pricing, 

absorption, target markets, etc.

• Challenges & Opportunities

Methodology

Census Bureau• Baseline 2010

2012 ND Statewide Housing Needs Assessment• Model 1:  Historic trends• Model 2:  Future growth 

based on recent changes 

American Community Survey• On‐going survey• Data collected ‘07‐’11• Samples diminish in rural 

areas• Margin of error varies

ESRI• Nat’l demographic provider• Estimates per July 2012• Multiple data sources

Maxfield Research• Projections adjusted based 

on local data & our methodologies 

Data Sources: 

4

North Dakota Planning Regions

Demographic Findings

Region VI population declined between 1990 & 2010                           (‐15% | ‐9,931 people)

Population (2010) Region VI: 56,363 (8.4% of ND) Stutsman: 37.4% Barnes: 19.6% 

Projected population growth in Region VI 2010‐2020: +1,924 (+3.4%)

Most Region VI growth in Stutsman & Barnes 

Baby boomers driving growth‐3.2

‐5.7

1.4

‐5.5

‐10.1

9.1

27.5

5.6

‐20.0 ‐10.0 0.0 10.0 20.0 30.0 40.0

19 & under

20 to 24

25 to 34

35 to 44

45 to 54

55 to 64

65 to 74

75+

Percent

Age

Projected Population Growth by AgeNorth Dakota Region VI (2010‐2017)

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

1990 2000 2010 2020 2030

Region VI Population: 1990 to 2030

5

Demographic Findings

 ‐

 5,000

 10,000

 15,000

 20,000

 25,000

 30,000

1990 2000 2010 2020 2030

Region VI Households1990‐2030

Wells Co.

Stutsman Co.

McIntosh Co.

Logan Co.

LaMoure Co.

Griggs Co.

Foster Co.

Dickey Co.

Barnes Co.

2.55

2.42

2.30 2.29 2.28

2.65

2.50

2.392.35 2.34

2.00

2.25

2.50

2.75

3.00

1990 2000 2010 2020 2030

Average Household Size

Region VI

North Dakota

Average household size has decreased steadily over the years… • 2.55 in 1990• 2.30 in 2010 (‐9.6%)

Household sizes throughout North Dakota are somewhat larger, but experienced a similar drop… • 2.65 in 1990  • 2.39 in 2010 (‐9.7%)

This trend is an indication of an aging household base 

By 2020, the Region is expected to add +934 households

Demographic Findings

About 72% of all households owned their housing in 2010• 65.4% statewide

Estimated 19,350 households (79%) in 2012  are income‐qualified for rental housing (based on the median gross rent of $470) 

By 2020, the total income‐qualified population is projected to increase +4.0%

 ‐

 500

 1,000

 1,500

 2,000

 2,500

 3,000

 3,500

 4,000

 4,500

<25 25‐34 35‐44 45‐54 55‐64 65‐74 75+

Households

Region VI Households Income‐Qualified for Rental Housing

2012

2017

69.0

72.1

74.4

76.5

81.3

83.6

79.3

66.7

78.8

71.9

65.4

31.0

27.9

25.6

23.5

18.7

16.4

20.7

33.3

21.2

28.1

34.6

0% 20% 40% 60% 80% 100%

Barnes

Dickey

Foster

Griggs

LaMoure

Logan

McIntosh

Stutsman

Wells

Region VI

North Dakota

2010 Household Tenure

Owner

Renter

6

Demographic Findings

Married couple households with children declining • ‐26.1% (2000‐2010)

Non‐family households with roommates increased +27.2% (+315 households) and single‐person households increased by +264 (+3.3%)

An increase in the percentage of these households indicates a shift in housing needs that favors rental development 

‐17.1%

‐26.1%

13.4%

‐1.1%

19.8%

2.1%

17.4%

3.3%

28.2% 27.2%

‐40.0%

‐30.0%

‐20.0%

‐10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

North Dakota Region VI

Household Type2000 ‐ 2010 Percent Change

Married w/ Child Married w/o Child Other Fam Living Alone Roommates

‐50.0%

‐30.0%

‐10.0%

10.0%

30.0%

50.0%

Household Type by County2000 ‐ 2010 Percent Change

Married w/ Child Married w/o Child Other Fam Living Alone Roommates

Region VI employment grew 6%

Region 67.7%

Region 19.1%

Region 213.5%

Region 34.9%

Region 415.1%

Region 536.5%

Region 723.1%

Region 87.0%

2011 Average Employment by Region% of State Total

North 

Dakota Region 1 Region 2 Region 3 Region 4 Region 5 Region 6 Region 7 Region 8

% Growth '00‐'12q2 34% 260% 41% 4% 11% 26% 6% 26% 81%

Avg. Annual Growth 1.9% 12.7% 2.1% 0.1% 0.7% 1.7% 0.2% 1.8% 4.2%

AVERAGE EMPLOYMENT

NORTH DAKOTA PLANNING REGION COMPARISON

2000 ‐ 2012 Q2

 ‐

 20,000

 40,000

 60,000

 80,000

 100,000

 120,000

 140,000

Average Employment by Region

Region 6

Region 1

Region 2

Region 3

Region 4

Region 5

Region 7

Region 8

7

North Dakota Planning Region Wage Comparison

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012 Q2

Average Weekly Wage Growth Trends by Region

Region 6

North Dakota

Region 1

Region 2

Region 3

Region 4

Region 5

Region 7

Region 8

North Dakota

Region 1

Region 2

Region 3

Region 4

Region 5

Region 6

Region 7

Region 8

% Growth '00‐'12q2 80% 234% 102% 61% 54% 47% 61% 59% 166%

Avg. Annual Growth 5.8% 17.3% 7.2% 5.0% 4.2% 4.0% 4.8% 4.5% 10.6%

AVERAGE WEEKLY WAGE

NORTH DAKOTA PLANNING REGION COMPARISON

2000 ‐ 2012 Q2

$631

$803

$1,314

$783

$640$693

$780 $780

$901

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

Region6

NorthDakota

Region1

Region2

Region3

Region4

Region5

Region7

Region8

2011 Average Weekly Wage Comparison

Region VI Employment Inflow/Outflow

Inflow (Employed in Area, Live Outside)

Outflow (Live in Area, Employed Outside)

Interior Flow (Employed and Live in Area)

16,985

8

1,912

515

587

314

524

182

297

2,983

418

‐1,904

‐854

‐632

‐443

‐828

‐373

‐332

‐3,301

‐670

8

‐339

‐45

‐129

‐304

‐191

‐35

‐318

‐252

‐4,000 ‐3,000 ‐2,000 ‐1,000 0 1,000 2,000 3,000 4,000

Barnes

Dickey

Foster

Griggs

LaMoure

Logan

McIntosh

Stutsman

Wells

North Dakota Region VI Employment Inflow/Outflow by County

Inflow

Outflow

Net

Region VI Employment Inflow/Outflow by County

----- Worker Outflow----- -----Worker Inflow-----

Region VI Employment Inflow/Outflow by Metropolitan/Micropolitan Area

Inflow (Employed in Area, Live Outside)

Outflow (Live in Area, Employed Outside)

Minot 

Bismarck 1,290 workers

Aberdeen 

Fargo2,567 workers

Grand Forks

Wahpeton

Region VI687 workers

1,226 workers

9

Housing Characteristics

Housing stock is predominantly single‐family homes, ranging from 68.7% in Stutsman County to 92.5% in McIntosh County

Barnes and Stutsman Counties had the greatest portion of large multifamily structures (20+ units) 

For‐Sale Housing

40,000

50,000

60,000

70,000

80,000

90,000

100,000

Median Value

County

Region VI Owner‐Occupied Housing Values (2011)For‐Sale Housing Stock        (per ACS)

17,600+ owner‐occupied units

Median value of $77,000

• $49,700 (McIntosh) 

• $92,800 (Stutsman)

52% of housing stock located in Stutsman & Barnes

31% of owner‐occupied homes in  Region VI valued <$50,000

10

For‐Sale Housing

New Construction 

Newer subdivisions

• Avg. lot cost w/services: $30k+

• Home value w/lot: $175k+

• Mostly build‐to‐suit, few spec

Lot availability

Premium  for new construction ($140 PSF+) 

Infrastructure costs – risk to builders/developers

Active Listings (Feb. 2013)

Limited inventory

Lack of centralized MLS

Median List price: 

• Jamestown: $135,000

• Valley City: $130,000

• Dickinson: $294,000

• Williston: $241,610

• State: $180,000

Rental Housing

0

500

1,000

1,500

2,000

2,500

3,000

Units

County

Rental Units by County ‐ 2011

1, 33.9%

2 to 4, 20.6%5 to 9, 13.8%

10 to 19, 16.2%

20+, 13.0%

Other, 2.5%

Rental Units by Size of Structure

Region VI Rental Stock (per ACS)

6,500 rental units

64% of rental units in Stutsman and Barnes Counties

Most rentals are single‐family (34%)

30% of rental stock in 10+ unit buildings

Median contract rent averaged $397/mo. • $304 (Griggs) • $433 (Stutsman)

11

Rental Housing(All Ages General‐Occupancy Bldgs. 4+ Units) 

Housing Stock• Older rental housing stock• Avg. rent per square foot well under $1.00/PSF

Vacancy factor • Affordable – higher vacancies than market rate

No. of Properties• Maxfield surveyed 99 properties | 53 responses | 1,175 units

• Ongoing

Typical Market Rate Rents • 1BR ‐ $420• 2BR ‐ $505• 3BR ‐ $670

454

138

105

52

119

63

108

509

112

0 100 200 300 400 500

Barnes

Dickey

Foster

Griggs

LaMoure

Logan

McIntosh

Stutsman

Wells

Units

County

Region VI Rental Units by County

Senior Housing

Inventory • 700+ units• 53% of units AL or AL/Basic  Care

• 58% of product in Stutsman & Barnes Counties

• Nearly all rental units                     (6 units are for‐sale)

• 27 properties contacted | 18 responses | 485 units

146

104

194 190

82

0

50

100

150

200

250

Active Adult Congregate Assisted Living AL/Basic Care Memory Care

Region VI Senior Units

193

59

3626

6051 55

220

16

0

50

100

150

200

250

Senior Units by County

12

Phase I Demand Summary

Demand Drivers

• Demographics

• Economy & Job Growth

• Consumer Choice | Preferences

• Turnover

• Supply (i.e. Existing Hsg. Stock)

• Replacement need (i.e. functionally /physically obsolete)

• Financing 

Phase I Demand

Household growth & tenure

Turnover

Percent capturable by county

Phase II Demand

Refined based on market findings

Income‐qualified households 

Demand by product type | Preferences

Percent capturable by submarket

Phase I Demand Summary

Total 

Demand

General‐Occ. 

Total

For‐Sale 

Housing

Market 

Rate Rental

Senior Housing 

Total Active Adult Congregate

Assisted 

Living

Memory 

Care

Region VI 2,676 1,723 670 1,053 953 335 251 176 191

Barnes County 500 409 157 252 91 6 60 ‐5 30

Dickey County 230 117 40 77 113 53 30 21 10

Foster County 171 91 32 59 80 17 25 21 18

Griggs County 106 40 17 23 66 19 10 22 15

LaMoure County 156 62 32 30 94 42 17 21 14

Logan County 68 24 14 10 44 21 14 ‐2 10

McIntosh County 111 40 19 21 71 19 17 15 20

Stutsman County 1,131 871 331 541 260 106 59 47 48

Wells County 204 69 29 41 135 53 20 36 26

Source:  Maxfield Research, Inc.

General‐Occupancy Housing Excess Market Rate Senior Housing Demand

2012 ‐ 2020 2017

TABLE F‐1

HOUSING DEMAND SUMMARY BY COUNTY

NORTH DAKOTA REGION VI

 January 2013 

Demand for over 2,600 housing units through 2020

13

Phase I Demand Summary

0

200

400

600

800

1,000

1,200

Barnes Dickey Foster Griggs LaMoure Logan McIntosh Stutsman Wells

Units

County

Region VI Demand Summary 

Senior GO Rental For‐Sale

670

1,053

953

0 200 400 600 800 1,000 1,200

For‐Sale

GORental

Senior

Units

Region VI Demand by Product Type

Rental housing = 60% of total general‐occupancy demand

Senior housing accounts for 36% of total demand

Active adult (few services) has highest senior demand

Stronger senior demand in more rural counties

42% of all demand in Stutsman County

Housing Affordability

For‐Sale (Assumes 10% down payment and good credit)

Entry‐Level Move‐Up Executive Entry‐Level Move‐Up Exec/Det.Price of House $50,000 $125,000 $200,000 $75,000 $100,000 $200,000Pct. Down Payment 10.0% 10.0% 10.0% 10.0% 10.0% 10.0%Total Down Payment Amt. $5,000 $12,500 $20,000 $7,500 $10,000 $20,000Cost of Loan $45,000 $112,500 $180,000 $67,500 $90,000 $180,000

Interest Rate 3.750% 3.750% 3.750% 3.750% 3.750% 3.750%Number of Pmts. 360 360 360 360 360 360Monthly Payment (P & I) ‐$208 ‐$521 ‐$834 ‐$313 ‐$417 ‐$834(plus) Prop. Tax ‐$75 ‐$188 ‐$300 ‐$113 ‐$150 ‐$300(plus) HO/Assoc. Fee for TH ‐$17 ‐$42 ‐$67 ‐$125 ‐$125 ‐$125(plus) PMI/MIP (less than 20%) ‐$20 ‐$49 ‐$78 ‐$29 ‐$39 ‐$78

Subtotal monthly costs ‐$320 ‐$799 ‐$1,278 ‐$579 ‐$731 ‐$1,337

Housing Costs as % of Income 30% 30% 30% 30% 30% 30%

Minimum Income Required $12,783 $31,957 $51,131 $23,174 $29,232 $53,464

Pct. of Region VI Housholds 85.6% 63.0% 24.9% 61.7% 66.3% 24.9%

Rental

1BR 2BR 3BR 1BR 2BR 3BRMonthly Rent $420 $505 $670 $675 $900 $1,000Annual Rent $5,040 $6,060 $8,040 $8,100 $10,800 $12,000

Housing Costs as % of Income 30% 30% 30% 30% 30% 30%

Minimum Income Required $16,800 $20,200 $26,800 $27,000 $36,000 $40,000

Pct. of Region VI Housholds 81.2% 77.1% 69.1% 67.7% 58.9% 54.3%

REGION VI HOUSING AFFORDABILITY  ‐ BASED ON HOUSEHOLD INCOME

Single‐Family Townhome

Existing Rental  New Rental

• Majority of HHDS.  can afford housing in Region VI 

• Older properties are indirectly meeting the needs of households who need affordable housing

14

Challenges

Development Cost/Price Sensitivity

• Financially difficult to plat new lots 

i.e. raw land costs, entitlements, infrastructure, financing, etc.

• Developers sensitive to carrying costs of unsold lots

• Lot‐to‐home ratio % low in Region VI

• Nationally 18% to 25%

• Region VI <15% 

Multifamily Development Costs

• Difficult to cash‐flow given achievable rents/development costs

Challenges

• Competition for labor in oil patch

• Lack of workers & housing could hinder economic development

• Where do new employees working in the region live?

• Wages are lower than other North Dakota regions

• Land & construction costs up

• Loss of housing stock from flood buy‐outs

• Older housing stock

• Housing development talk…but no action

• Rural water dispute | Infrastructure costs

• Financing/Lenders

• Others…

15

Opportunities…

• Housing costs are affordable & lower than most ND submarkets

• Capitalize on other markets with housing shortages (i.e. oil patch, Bismarck, Fargo, 

Aberdeen, etc.)

• Rising cost of housing in oil patch driving existing residents elsewhere

• “Bakken spillover” from the oil patch to Region VI

• Capitalize on new employment growth opportunities 

• Private/public partnerships

• Access and Transportation

• Upgrade and diversity housing stock in the Region

• Temporary housing

• Public relations campaign 

• Others…

Next Steps…

• Quantify demand for all housing products (By submarkets)

• Identify untapped market niches for target markets for new housing 

• Recommend specific housing concepts 

• Product type

• Units/type/mix/amenities, etc.

• Pricing/timing

• Discuss need for public/private partnerships to strengthen development potential

• Identify and discuss additional challenges and opportunities for Region VI communities

Provide Critical Recommendations to Guide Future Housing Development in Region VI

16

• Recommend housing programs & resources

• Review housing policies | modify as necessary

• Discuss need for public/private partnerships to strengthen development potential

• Identify and discuss additional challenges and opportunities

Home Improvement Programs

• Fix‐up/Rehab Loans

• Energy Efficiency Programs

• Deferred Loan Programs

• Remodeling Advisor

• Home Fairs

First‐time Home Buyer Programs

• Down Payment Assistance

• Homeownership Education & Counseling

• ND Housing Finance Agency

• Military Assistance

• Lower interest rates

• Land Trust

• Rent to Own

Housing Programs

Next Steps…

Matt Mullins Maxfield Research Inc. 612.904.7971mmullins@maxfieldresearch.com

www.maxfieldresearch.com

http://twitter.com/realestatedev

https://www.facebook.com/pages/Maxfield‐Research‐Inc/

http://www.linkedin.com/company/maxfield‐research‐inc

Questions ….

Questions