Rumors continue to abound in the Bakken about how the boom is over and the bust is here. Despite various pipeline projects in the works and approximately 900 wells awaiting completion, economic indicators such as rent prices are suggesting that although the Bakken might not be busted, the economic landscape of the region is beginning to return to normalcy, much to the chagrin of property owners and rental agencies.
Rental prices in Minot, North Dakota, have recently taken a steep dive. The city is located on the peripherals of the Bakken formation and was a former key player for oil and gas activity. In 2013, the city had a recorded population of roughly 46,000. But now, many oil and gas firms are shifting their focus to the long-term viability of the shale play and boomtowns such as Williston and Watford City are continuing to expand in attempts to attract a more permanent workforce.
It seems rental prices in Minot are now, however, on a steady decline. Rental agencies are beginning to lower rent prices in order to attract tenants but with no avail. Despite the price reductions, one rental agency that wished not to be named has received no inquires. Average apartment prices have dropped to about $1,000 per month for a two bedroom apartment. Five bedroom houses are now renting at roughly $2,000 per month.
Currently, Prairie Property Management is offering two months free rent with a $500 deposit at a monthly rate of $1,900 for a three bed and three bath unit. IRET Properties, a property management agency operating in Minot, has listings for one bedroom apartments as low as $650 per month while three bedroom apartments are listed as low as $1050 per month. These prices are a substantial decrease from the listing prices renters were facing even a year ago, let alone at the beginning of the boom.
Amidst the slowdown, oil and gas operators are retreating further into the core of the Bakken. Recently, Halliburton announced that it would be closing its Minot facility and transferring many of the jobs to its facilities located in Williston and Dickinson. The company shut down the facility the beginning of this month due to the changing needs of its customers, Halliburton spokeswoman Susie McMichael told the Associated Press.
As activity, shifts to the heart of the Bakken, there is less demand for housing in the surrounding areas. But even in the Bakken’s core, rent prices are beginning to drop. Williston and Watford City once had rent prices that rivaled metropolitan areas such as New York and San Francisco. Tenants that were formerly sleeping in their cars due to a lack of housing are now able to negotiate rental prices in properties that were formerly able to heavily scrutinize who they would rent to.
Terry Metzler of Granite Peak Development told Reuters, “You’re starting to see prices fall this year as more units come online.” Other property managers reported that for now, they are having no trouble filling vacancies, at least in Williston and Watford City. Minot, however, seems to be facing a different issue.