Home / News / Bakken News / Reality hits North Dakota’s pricey apartment market; rents drop
Construction continues on an apartment building in Williston, North Dakota, set to contain a swimming pool and other amenities February 27, 2015. REUTERS/Ernest Scheyder

Reality hits North Dakota’s pricey apartment market; rents drop

It is getting cheaper to rent an apartment in North Dakota’s oil patch.

Prices, which only last year rivaled levels in New York City and Geneva, have slipped about 15 to 20 percent in the past two months as dozens of new apartment buildings opened in Williston, Watford City and other oil hub cities.

Growth in demand has slipped because the plunge in crude oil prices has led to cuts in capital spending by energy producers.

There are still about 1,800 energy-related jobs unfilled in the No. 2 U.S. oil-producing state, and there is still demand for apartments. But the accommodation shortage is nothing like it was when the state’s oil boom began six years ago. As new developments start leasing, tenants are able to negotiate lower rents.

“You’re starting to see prices fall this year as more units come online,” said Terry Metzler of Granite Peak Development, which has built apartments and a shopping center in Williston, considered capital of the state’s oil boom, and has an additional 480 apartments and houses under construction.

When the state’s oil boom began in 2009, prospective tenants swapped stories of sleeping in cars overnight because there wasn’t enough housing. The dozens of new properties opening in the past two years and at least 20 more opening in 2015 have helped put an end to that.

Property managers, who only a few months ago could heavily scrutinize potential tenants and reject anyone whose credit or behavior was in doubt, are now so eager for move-ins they’re all-but volunteering to carry boxes.

Williston issued building permits for 1,290 apartment units in 2014, 10 times the rate in 2009. The city issued 333 home building permits in 2014, the highest in the city’s history and more than double 2013.

Many developers say they are confident the state’s oil patch will not go belly up like it did during two previous busts in the 1980s and 1950s. Stropiq LLC, for instance, is seeking zoning board approval for a $500 million development just outside Williston that will include retail and office space, as well as 900 apartments and townhomes.

These and other projects are moving forward despite recent job cuts by Halliburton Co and others that have cooled economic growth and led state officials to predict a drop in oil tax revenue this year.

Property managers say that, for now, they still have no problem filling spots as they become available, especially since prices are falling. Occupancy data are not aggregated across the region, but checks with individual properties showed most are 92 percent to 95 percent full.

Related: Oil dropped, what about rent?

HOT TUB AND HAPPY HOUR

At Williston’s Dakota Ridge, a luxury complex of three-story buildings owned by private equity firm Granite Peak Partners Inc (not affiliated with Metzler’s group), a two-bedroom apartment rented for $3,200 per month in early 2014.

A year later, even with recent recently added perks like a 10-person hot tub and free alcohol and snacks in the common lounge, the same apartment goes for $2,600.

KKR, the private equity giant, is slashing rents at Prairie Pines, a Williston upscale apartment complex it owns with CP Realty, with two-bedroom units costing $2,300 per month, 18 percent cheaper than last summer.

“I could see the quality of life improving for some people if they’re not worried each month about how they’re going to make rent,” said Justin Hammer of IRET, which owns apartment complexes in Williston and Minot, some of which it has begun pricing below market rates to appeal to families and retirees.

Community leaders have reacted to the apartment price drop with barely concealed glee, describing it as a sign the region is not just a bedroom community for roustabouts anymore.

“You can’t build a vibrant community with services, quality of life and families when you have some of the highest rents and costs in the nation,” said Shawn Wenko, Williston’s director of economic development.

In Dickinson, home to the regional office of the state’s largest oil producer, Whiting Petroleum Corp, the price of a two-bedroom apartment at Sterling Group’s Sierra Ridge was cut last week to $1,775 from $2,159.

And yet real estate companies still see room for more developments.

“We still, even with all we’re building, don’t have enough housing in this region,” said Metzler of Granite Peak Development.

(Reporting by Ernest Scheyder; Editing by Cynthia Osterman)

This article was from Reuters and was legally licensed through the NewsCred publisher network.

97 comments

  1. Wow about time alrhough we are still pluggin away here in CO

  2. Good. I hope they are forced to drop rent even more.

  3. Sure they are still raping people and wonder y they dont stay

  4. Our rent went up 250 Jan 1

  5. Only 1800 for a small one bedroom. Grab your ankles. They need to drop everyone’s rent at least 500

  6. It’s dropped ? Maybe some one should inform the people renting them out cause I don’t think they have received the Memo yet !

  7. To bad it doesn’t drop across the state, not only in the western cities! Everyone that rents housing raised their prices too,

  8. my mother lives in Williston and just received a notice her rent is going up

  9. Let me give you folks a quick lesson in economics. If you want to know why rents in the patch are so high it is because oil has dropped. Now let me explain. Investors who have money to invest, can invest that money ANY where in the US they choose. When they look at a market like Williston they know there will be a high rate of return ($3,500 a month rents), other wise why would they choose to build there? Because NOW rents may drop drastically, and those investments don’t look very promising. So they need to get in, make $ and if things go bad they have made their money back.

    Really it is no different than the oil field worker. He comes to Wiliston not for the sun and beaches, but to make crazy good money fast.

    So while it is easy to be upset that rents are as high as they are, simply understand the economics of it.

    • I agree with you but only to an extent. There is a lot of gouging there, food/grocery prices for example…

    • I have been out there and seen it first hand. But wages are so crazy high you almost have to in order to survive.

    • Prices are dropping and they will not reach their previous rates anytime soon. Things will continue to drop before things stabilize. Then once prices level off after a rise things will pick up, but I highly doubt that they will ever reach the boom status that the state witnessed over the past 4-5 years.

    • Very accurate. Also they are building with the knowledge they may have 7-8 years to recoup costs and profits versus 14-15 years in other markets.

    • Rents are not high because oil dropped…. who fell down and bumped their heads today? They have been high here for over 5 yrs. Economics please. Greed is the word. Get it while you can is another way to put it.

    • I’m not a proctologist but I think your dead on….dayum Obama care!!

    • Rent is high because companies and individuals are paying the prices offered…. as soon as occupancy fallw….prices will fall…..

    • Joseph,
      You missed my point. The prices are high becuase the investors knew the price of oil would drop some day, and that is why they have to charge what they do. MUCH higher risk, thus they need to get their money back in a much quicker time frame. And as others have pointed out, it is a free market. Something is only worth what someone will pay for it. Call it greed, but greed is what brought everyone to the Bakken. The thought of making 5X (or MUCH more) more what people make back home.

      And yes, rents will start dropping when supply exceeds demand. If the price of oil stays low, long enough, and enough people are layed off, and enough people leave the rental market. Then prices WILL drop, and those investors will be forced to lower rents, or have a lot of empty units.

    • Just like the stories I used too hear about the Alaskan pipeline days..! Did they have strip clubs in Williston..?

    • and what about the people who have lived there many years paying rent and are not in the oil field work and living on just social security and were forced to move due to their rent being jacked up sky high???? I call that pure greed…

  10. Companies are
    Still laying off workers but the rents are still very high and no sign of coming down. To park my motor coach is $850 per month.

  11. Good! I hope those greedy SOB’s lose everything!

  12. While all of you are wishing the greedy SOBs lose everything, I will remind you that greed is what has brought most everyone to the Bakken, including the workers. Without greed the world quits going around.
    http://youtu.be/RWsx1X8PV_A

  13. I don’t know how they can say it’s dropped. I live in my ex husbands basement because I have other bills to pay besides 1500 for rent. I’ve been looking all day for a pet friendly rental and I CANT AFFORD ANYTHING. I’m responsible and have a good job with free health ins with ties to this community and a strong church family that I don’t want to leave but may be forced to just to find housing I can afford. Sad just sad!!

  14. Dakota Juma I should’ve just waited it out :/

  15. If you are in a signed lease they can’t raise your rent until lease renewal. Just the same that if the apartment next to you is 200 cheaper they won’t let you pay the lesser, until you resign lease for the new agreed price.

  16. it was too high to start with..now its reasonable

  17. Hello, 4500 per month is insane and it’s not even put together right

  18. How is the rents in Dickinson?

  19. I remember sleeping in the Williston motel it was like laying on 20 + year old sway back horse hope they upgraded that crap hole

  20. I’m almost at the end of a 1 year lease at $2300 a month. I can resign a 6 month lease at $1900 now but I’m gonna wait these next 2 months and hope it comes down a little more.

  21. You can buy an acre of land for 3500 a month and have it paid off before long and sell it when you leave

  22. Good I hate when they jack up the prices just because people bust there ass . Hope they fall further than we drill

  23. Some call it greed…… Some call it the American Dream. Everyone is welcome to walk away or stay and play. Life has been this way for thousands of years. Everyone’s destiny is in part , of all the choices we have made in our past.

  24. Yeah my rent is $2550 for a 2 bedroom…. They need to lower it because the quality of living isn’t $2550.

  25. I have a 2004 wildcat bunkhouse fifthwheel 1 slide for sale needs a little corner patchwork, everything works goodtires and brakes $8500 clean title

  26. I’m worth more dead than alive… Lol

  27. No matter how much I work

  28. It will re-bound…. Treat your customers good
    We remember

  29. looks like you may have to travel this summer Matt Allen

  30. I stayed in williston last summer rent was 3800$ a month three bedroom

  31. I never paid more than $400 per month, I lived in company housing duh

  32. If this was a big surprise to ND. Why didn’t they put the appropriate committee in place to monitor this. Just saying. Sounds like they road the boom of $$$$$$$ like the rest of them!

  33. It’s about time!!! They have ripped enough people off…Maybe they should just set empty…

  34. I’ll take one of those 1800 jobs, with a rotation (hitch) schedule. I was laid off from Slb last month. Online applications are a joke, who really gets hired that way?

  35. I was there to buy cheep and sell high and ran back to Texas

  36. Fk that , rent way too expensive and isn’t that good.

  37. There was a lot of greed from renters up here bro. They were evicting life long residents just so they could charge 3x’s what they were getting. Now that it’s drying up, they’re freaking out.

  38. Bout time! There is more than oil workers that live in those communities.

  39. We heard there will be 30,000 layoffs in the Williston ND area before June 2015. What is the Truth?

  40. 10 mexicans to every room makes it affordable..

  41. I pay nothing for rent..

  42. They only charge that much because people paid that nobody forced you

  43. All I got to say is yes when oil is high, rent and every other damn thing is also, that bieng said so is pay. However oil ain’t so hot anymore, some of us got decent money coming in some don’t have anything, some are fixing to take a pay cut. Sure leave your apartment rent high, and see how many people rent. Let’s just keep charging 1900.00 a month for a small two bedroom. And to all you fellows coming up here, I’d hate to say it but I make 14.00 an hour more here but oddly, at the end of the month I might as well have been home cuz it’s the same amount of money, plus warmer weather lol

  44. Buy up land now! When it kicks back off you’ll be sticking rich

  45. It’s a boom it’s always temporary be it months or years

  46. It’s dropping fast. Moving up here last week I saw 2400 now this week they’re begging at 1800

  47. Michael Tjapkes SUre you don’t want to go back?

  48. James Luke Daugherty u need ta do something!

  49. I’m in an apartment dog!! Jessica Pruitt Clark 2 bed for 21

  50. Its messed up how many natives were forced to leave there hometown cuz of greedy douschebags. There should have been a law against jacking up old residents rent.

  51. I worked there for 2.5 years but refused to live there. Why work that hard to make good money just to give half of it away to those greedy jerks. I just traveled back and forth to my 500 a month place in Butte, MT. Dummies lol

  52. Free booze comes with the apartments nice

  53. Can wait to watch the Bakken burn. Greedy mf’s sealed their fate long ago.

  54. Oilfield workers+ free alcohol, haha !

  55. Looks like the partys over.

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