In this blog post, I am going to try to explain one of the mistakes that has been made in Dickinson that has prevented permanent growth. No, I am not going to write about local people in Dickinson being unfriendly, uncooperative, not helpful, and hostile for the 100th time, I am going to write about something that I have not covered yet.
I will illustrate what I am trying to explain using a real life example of a woman named “Trudy” who moved to Dickinson with her husband approximately two years ago. Trudy and her husband are in their late forties, and they moved to Dickinson because of her husband’s job. They had moved to different towns more than several times during their marriage because of her husband’s job.
Initially, when they moved to Dickinson two years ago, they rented an apartment. They wanted to look for and try to find the right house for them. With the sale of their previous home and their financial situation, they could have afforded to buy the most expensive home listed for sale in Dickinson if they wanted to. But they were really only looking for a nice looking, comfortable, modest home that was the right size for them.
Trudy and her husband did not like paying the very high apartment rent that was the result of the oil boom that began in 2007 in western North Dakota. The rent for a two-bedroom apartment in Dickinson was typically $2,000 to $3,000 per month. Most people recognized that if you are going to pay $24,000 to $36,000 per year in rent, you would be much better off financially by using that amount of money to purchase a home.
Trudy liked Dickinson, and she liked the people in Dickinson. She was looking forward to buying a house and making a home here with her husband. She was looking forward to getting out of their apartment, this was only supposed to be a temporary arrangement.
Trudy looked, and looked for a house in Dickinson. She looked at every on-line listing, she looked at all the printed real estate guides, she went to real estate offices, she drove around Dickinson looking at homes “For Sale By Owner” and to look for any house for sale that she wasn’t already aware of.
Trudy looked for a house in Dickinson for 1-1/2 years. Though from time to time she found a house that would have been O.K. for her and her husband, everything was overpriced. It was as if the home owners and the real estate agents did not think that anyone else was aware that the oil boom was over, and that the oil field was not going to pick up any time soon, and possibly not for a long time. It also appeared that the home owners and the real estate agents believed that there were people “with a lot of money”, that would just go ahead and buy a house for $250,000 to $450,000 without even thinking about it.
Most people that are capable of purchasing a home for $250,000 to $450,000 are financially shrewd people, who are not in the habit of losing money. These people don’t willingly over-pay for anything. But in Dickinson, there seemed to be this wide-spread belief that there were vast numbers of home buyers that didn’t know how much homes were worth, and that the thought never entered their mind, “What could I expect to re-sell this home for in the future?”
Dickinson began to lose its charm for Trudy and her husband. The people didn’t turn out to be that friendly or very helpful after all. They could not find a reasonably priced home, and living in their apartment was unpleasant. There was not a lot to do in Dickinson. Eventually, both Trudy and her husband agreed that they would be happier and better off if they just moved to a different state.
I used this story up above to illustrate that both the excessive gouging on housing during the oil boom, and the current and continuing over-pricing on houses, has made about 90% of the people who came to Dickinson in the past ten years make up their minds that they would never stay in Dickinson. I am not saying that 10% of the people decided to stay, I am saying that 90% of the people made up their minds that they would never stay.
Of the 10% of the people who came to Dickinson in the past ten years who didn’t make up their minds that they would never stay, many or most of this 10% had to leave anyway because they lost their job, or they could not find a reasonably priced house. Trudy and her husband would be in this 10%.
In other words, Dickinson drives almost everyone who comes here away. The population of Dickinson is going to continue to decrease every year, for years to come.
Dickinson58601 
I think that is for the most part a fair representation. Trust that our hesitancy to buy anything had a lot to do with being a bit older* with enough naive mistakes in the past to have learned a thing or two. The issue always was the prices being asked. We could buy, say, a $400K** house, but knew unless it were really special, unlike everything else in its price-point, we’d very likely lose money, maybe a lot of money. The thing about trying to resell a house, a house which has been lived in but NOT really improved (gorgeous landscape, or just something really special which will set the house apart from competition), a fair number of buyers will say, “Forget it, I can buy a brand new house for that, one that nobody’s dog’s been in, nobody’s kids have made kids’ messes in, nobody’s put holes in the walls, yada yada…” Then there’s the issue that I’m incredibly picky. I see crimes against architecture and good taste everywhere (not just here, they really build some ugly houses in Wyoming, only for one example). I just never came across anything I truly, truly loved which ALSO went along with an appropriate PRICE. There is an old house in the middle of downtown that I like A LOT. It is (and has been since it went on the market a long time ago) overpriced because the interior looks like 1990. Now come on. That’s fine if the price reflects awareness that a house is quite dated or in need of restoration, renovation.
Again, it was always about the prices sellers (and those working with them) were expecting to get for the product they were/are offering.
* We are a bit older, but are surrounded by families well into their 30’s, early 40’s, and a good number of our neighbors are even older than we are. Up until recently (when screening must’ve become more lax to increase occupancy), I would’ve described most of the folks around here as people who had come from home ownership somewhere, and many still owning homes elsewhere.
** $400K seems to be about as much as anybody’s willing to spend for a home. I am NOT suggesting that’s average price, but the top of the range. Of course there are likely outliers. Look at what’s on the market now. There are several much higher. Only one of those would I have liked to own, and IT also needs updating, looks like 1990 in there, however lovely other aspects of the place may be. The price is too high.
P.s. What you haven’t done, or if you have I missed it, is talk about the way the road/streets are maintained in winter. I grew up with snow and have lived in at least three states with harsh, brutal winters. I know what excellent care & maintenance looks like. They do a very bad job at snow removal here, the worst I’ve seen. There was a day this past winter when even the road in front of the HOSPITAL was reduced to one lane (down from two lanes) and the cleared lane was still a mess. One would think routes to the hospital would be first priority. I said a prayer every time I ventured out, as (and this I suspect you’d write about) it was obvious many people on the road had no business being there, with front wheel drive, bald tires, coming from places where they’ve maybe never seen snow…. The winter roads here are a mess.
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I am glad that you don’t have any complaints about this blog post. I went ahead and wrote about your experiences to make the point that unreasonable house prices are driving people away, people who would like to live in Dickinson.
Also, once you buy a $400,000 house, what would your property taxes be, $3,000 to $4,000 per year? What would your homeowner’s insurance be $3,000 to $4,000 per year?
Why spend so much money on a house and have such high expenses if you know that you could probably be happy in a $200,000 house.
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One other thought I had about prices of homes….there is a contingent (I can’t estimate how large, but I know it exists) of native Dickinson residents who can afford a he**uva lot, maybe almost anything they would like. I don’t see them rushing in to buy these overpriced homes. I say that’s because they know better.
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Yes, Dan Porter who owns Dan Porter Toyota and Brad Fong who owns Parkway Ford, for example, they could each afford homes that cost several million dollars. They live in regular normal sized homes that they each probably paid $300.000 to $400,000 for. I estimate that there are about fifteen other people in Dickinson that could afford a multi-million dollar home. Yet there are no multi-million dollar homes in Dickinson, and all of the millionaires already have homes. So, the wealthy price-doesn’t-matter buyers that the real estate agents and property owners believe are out there looking to buy a house, this is all in their imagination, the very wealthy people in Dickinson already have a place to live.
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You think only 15? I would guess more. Germans are very good with money. I’d be better with money, but I’m only 1/4 German. 🙂
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Besides the Toyota dealer owner, and the Ford dealer owner, yes only 15 other people in Dickinson capable of buying a multi-million dollar home. Possibly the Chevrolet dealer owner. The Fisher Group owners, only a couple of them live here in Dickinson. One property investor that I know.
You would be surprised how little money some of the biggest business owners in Dickinson have. I mean big as in having a big building and many employees. One of the biggest business owners explained to me a couple of years ago how close they came to closing down their business due to lack of profitability.
“Germans are good with money”, not compared to Asian immigrants and India immigrants, many of whom do not drink alcohol, over-indulge in anything, and are humble. Germans drink alcohol, over-indulge in things, and are proud, boastful, arrogant people.
Asians and India Indians don’t go buy a Ford, Chevy, or Dodge 4×4, four-door, one ton, dual rear wheel truck that costs more than they make in one year, when they don’t even own a trailer or anything to tow with it. My former room mate who was German, and poor as he could be, 60 years old, fat, overweight, in bad health, probably headed to government subsidized housing, who didn’t own anything worth anything as far as vehicles or trailers, and couldn’t afford to buy anything big that needed to be towed, he was always trying to find some way to buy a 1-ton truck. Many/most of these Germans in Dickinson, no matter what their age, have to find some way that they can’t even afford, to drive a 3/4 ton or 1 ton truck with a 10,000 lb or more tow capacity, when never in their life have they owned anything and never in their life will they own anything that weighs nearly 10,000 lbs, because they have this stupid insane arrogance and pride.
What the Germans in Dickinson do, is drink beer, over-eat, and run their mouth about how much money people in Dickinson have, when they don’t even know that their own employer is about to go bankrupt. Many of the biggest companies in Dickinson are about to go bankrupt or are on the edge of bankruptcy. If they didn’t get drunk every day after work, and took out pen, paper, and a calculator and added up all of the monthly revenue, and figured out all of the monthly expenses, they would see how little money the large companies in Dickinson make.
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I guess I’m conflating Germans with German-Americans, perhaps. According to an article on DaveRamsey dot com, Germans save more money, on average, than Americans. Apparently one of the largest differences between average American and average German is how often we eat out. Americans eat out A LOT, much more than Germans eat out. According to same article, Germans tend only to shop when they need something, whereas Americans shop for fun, as a pastime. My German-American grandfather was a kind, sweet man everybody liked, despite the fact he was very, very stingy with money, always telling us “If you get three dollars save one dollar, unless you can save more!” That may have less to do with his being of German heritage and more to do with living during the Great Depression.
I know you are correct about Asians (Indians are Asian). They work very hard and are competitive and goal-oriented.
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The people that lecture about money management such as Dave Ramsey, Suze Orman, and Bruce Williams, sometimes have useful information, and sometimes they have terrible information.
Dave Ramsey and Suze Orman, especially Suze Orman, advise against going out to eat, just think of how much money you could save. I don’t look at life like Dave Ramsey and Suze Orman, and they don’t take into account that other people are not like them.
I have had some occupations where it was likely that I could be severely injured or killed. Some people have even riskier occupations than I did. It was important to look at life, that you had better do the things that you want to do now, because you might not have the chance later if you become cripple, paralyzed, or dead. Buying the car that you wanted, not a cheap ugly car that you didn’t want, eating where and when you wanted to eat if this is what you wanted to do, buying a boat, even though boats are a constant expense and they depreciate quickly.
Not especially in North Dakota, but in the South in places like Florida, Georgia, South Carolina, Alabama, and Texas, some people spend every waking and sleeping moment thinking about going out on their boat. Fishing in jungle-like swamps, water skiing and wake boarding in lakes, sailing in boats on the ocean. I have more happy memories from going out in the boat from when I was 7 years old to 14 years old, than I do from the entire rest of my life. It is not uncommon for people who own boats from maybe 25 years of age to 35 years of age, for those to be the happiest and best years of their life. But boats are expensive, and they require constant expense. If you are trying to save money, a boat is the worst thing you could buy. But are you trying to be happy, or are you trying to save money so that you have a bunch of it when you die.
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You make very, very good points and I don’t disagree. Granted, we know that none of us knows when our number will be up, but it stands to reason that if you’re, say, a librarian, your job is less risky than that of a guy working floors on a drilling rig. I see your point. My parents bought a boat (after I was out of the house, dang it) and I know you are right, boats and time on the water are good for the soul!
I can’t help but be attracted to Dave Ramsey. I watch the contrast between the way my parents (who worked hard, risked hard running a business, invested in land, lived within their means) live now vs. another family member (“Joan”), also their age who did not do any of those things. She retired just as soon as she could with nothing saved, a small mutual she received in her divorce. She lives on social security. She couldn’t afford to stay where she’d lived for 40 yrs., so she returned to her hometown to help take care of her 90+ y.o. mother. It’s been a few years now, and she’s a shell of her former self. She has no extra money to do much, she doesn’t dress beautifully as she used to. She can’t afford to do any number of the things she’d love to do. My parents, OTOH, are comfortable. They split their time between two homes. They give go on cruises, the last one Alaska. They spoil their grandchildren. They eat steak. That may sound like bragging, but I don’t mean it like that at all. I want to be smart enough and disciplined enough that at the very least I am not like “Joan”, not depending on social security and becoming more weary and disheartened as the years go on.
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