Tag Archives: real estate agents in Dickinson North Dakota

Banks Don’t Want To Lend, Or Own Property In Dickinson, And It Is Causing Real Estate Prices To Fall

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Banks in Dickinson, North Dakota do not want to loan money on property, and end up owning property in Dickinson, and it is causing real estate prices to fall.  No matter what people in Dickinson say or think about the economy in Dickinson remaining steady or improving, the Banks think the opposite, as demonstrated by their current lending practices.

The Banks don’t want to loan money on property in Dickinson because of the following doubts about Dickinson:

  • The Banks believe that real estate prices in Dickinson will continue to fall.
  • The Banks do not want to have loans on properties that are depreciating, which people would walk away from when they owe the Bank more money than their home is worth.
  • The Banks believe that the economy in Dickinson will continue to decline, with fewer jobs, lay-offs, businesses closing, and wage rates continually decreasing.
  • The Banks do not want to loan money based on people’s income history in Dickinson, because they believe that many people will lose their job, be unable to find another job, and their wage rates will continually decrease.
  • The Banks believe that people in Dickinson will default on their home loans, because they will get laid-off, be unable to find another job, their wage rates will drop, or they will find out that they owe more money on their home than it is worth as its value depreciates.
  • The Banks believe that they will likely end up owning many properties in Dickinson because of people defaulting on their mortgages.  The Banks believe that these properties will be depreciating in value greatly, they will be unable to find qualified replacement buyers, and the Bank will be responsible for paying insurance and high property taxes on these properties for many years.

In order to not have problems, the Banks are trying to not lend money on houses in Dickinson, because they don’t want to end up owning many, many houses in Dickinson.

The Banks don’t care, that the depreciation of home values that they are so worried about, they are perhaps the primary cause of this right now.

I will give two quick examples of home buyers who were willing to pay the seller’s asking price, but the Banks would not loan money to any of the buyers, so the home price dropped 10% to 20% in less than one year.

A friend of mine who has lived in Dickinson for 35 years, currently owns a home with $20,000 remaining on his mortgage.  I believe his current mortgage payments are $300 per month or less.  He is single, and a couple of years ago he no longer had to make child support payments of $700 per month or more on his two children, as they are now grown.  He has worked at the same company for over eight years, and his take home pay after all taxes is at least $3,000 per month. He owns several vehicles, which are paid for.

He agreed to purchase a neighboring house for $134,000, which was less than the current appraised value.  He thought that he would have no problem getting a mortgage for this house, based on his income, his employment history, his large equity in his current home, and having no car payments, credit card debt, or other debt.  But the Banks in Dickinson denied him a home loan.

If you use an on-line mortgage payment calculator, the mortgage payment for the $134,000 house would be less than $900 per month, plus his current mortgage payment is $300 per month.  For a single male with $3,000 per month income after all taxes, with no other debts, why couldn’t he afford $1,200 per month total for home payments?

The Banks did not want to make a home loan to him with payments of less than $900 per month, but for twelve years on his income he had paid nearly this much every month in child support.

Within less than one year, the seller’s asking price for this home that he agreed to buy for $134,000 had dropped to $120,000.

This second story is about my experience.  I own a home in Idaho which is paid for, but I have been working in Dickinson for almost six years.  For about three years, I was a roommate of a home owner in Dickinson, where I paid about $480 per month.  Once the Oil Boom ended, and so many out of state workers returned to where they came from, apartment rents in Dickinson decreased greatly, and I rented an apartment for less than $400 per month.  However, I wanted to get out of this apartment, because I had some bad neighbors.  I saw a very inexpensive manufactured home for sale in Belfield, on its owned land, so this was something that I was interested in buying:

A trucking company in Idaho, that was doing business in North Dakota, wanted to buy housing for three of its truck drivers, so this trucking company purchased a 3-bedroom single-wide manufactured home in Belfield on its owned triple lot, for nearly $50,000 in about 2014.  This trucking company completely furnished this manufactured home with everything from furniture, to appliances, beds, bed linens, cookware, and utensils.

This trucking company in Idaho, no longer does business in North Dakota, so they wanted to get rid of this manufactured home, just like it is, with all of the furnishings.  Six months ago, they were asking $25,000.  I went and looked at it, and it was fine with me.  The property taxes were only about $100 per year.  The mortgage payments, would be much less than I had been paying in rent for the past six years in Dickinson.

I went to or spoke to four or five Banks in Dickinson, and they each had their own excuse for not wanting to lend any money for this manufactured home, such as “We have been instructed to not lend money on any manufactured home whatsoever, no matter how new it is, or how much land is involved.” or “We can not lend money because the land is zoned commercial.”

I thought that this was ridiculous, I have very good credit, this was less money than a new vehicle costs, and the Bank could place a lien against my paid for home in Idaho if they ever needed to collect their money.  I was seriously considering putting this home purchase on my credit card, which has a credit limit of $35,000.

Many other people looked at this manufactured home in Belfield, and tried to buy it, but none of them could get a loan from a Bank.  A few days ago, the real estate agent sent me a text message, stating that the seller’s asking price is now down to $20,000.  This is a 20% price drop in six months.  I would have been happy to pay $25,000 with a home loan from a Bank.

I know one other person in Dickinson now, whose take home pay after taxes is at least $3,000 per month.  He is single, in his forties, and he has been employed with the same company for several years.  He recently applied for a home loan with a Bank in Dickinson, for a home owned by a relative of his who is willing to sell it to him for less than $200,000, even though the appraised value would be closer to $250,000.

This Bank informed him that they would approve him for a mortgage of up to $70,000.  Which means they don’t trust him to be able to make monthly payments of more than $400 per month.  If a single person’s take home pay after taxes is $3,000 per month, why wouldn’t this person be able to afford mortgage payments closer to $1,000 per month, and a mortgage of up to $180,000?

What I am explaining, is that Banks in Dickinson right now are being very restrictive on home loans, because for one thing, they expect home values to decrease.  The funny thing is, these Banks’ lending policies are the primary cause right now for why home values are decreasing.  They won’t loan money even when buyers are willing to pay the sellers’ asking prices.

Answering A Reader’s Questions About Buying A Home Now In Dickinson, North Dakota

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Do not buy a home now in Dickinson, North Dakota unless the price is very low, and it is a property that you will be able to rent out in the future.  I will thoroughly explain why I make this statement.  But I need to caution you right away that you do not want to let your employer or your coworkers find out that you are having any hesitation in wanting to buy a home in Dickinson.  Employers want to see that their employees are committed to being here, that they are dependent on their job here, and that they don’t plan on leaving.  Your coworkers will tell on you, believe me they will.  They all know that you are renting, and that you are looking at houses to buy.  The husband needs to blame the wife, that she is just so picky, the wife says, “The yard is too dark, the yard is too small, the bathroom is too small, the closets are too small, the kitchen is outdated, the bedrooms are too small.”  That way, everybody will just think that there is no pleasing his wife, everybody might even feel sorry for the husband, and have admiration for him in persevering with such a difficult wife.  The wife can blame the husband for not being able to find the right house, and everybody will just think the wife is crazy.  However, no one can find out that the truth is you are skeptical about buying a house in Dickinson right now.

Reasons not to buy a house in Dickinson, North Dakota right now:

  1. There is about a 50% chance that the oil field work in western North Dakota will continue to decrease, for years.  Not only will oil field related jobs continue to decrease, all jobs in all areas of the economy will subsequently decrease.  You can research this for yourself by reading about the history of North Dakota, and by talking to old local people that are not in business or real estate.  A good website to read is “A Brief History Of North Dakota Oil Production”, which is a collection of newspaper articles from the past about the Oil Boom in the 1950s, and the Oil Boom in the 1970s.  Supplement your reading by talking to old blue collar workers in Dickinson.  They will tell you about the difficulty in getting any employment for ten years after the 1970s Oil Boom, and that all employment was very low wage.  What I am telling you is there is a 50% chance that you or your husband may lose your job in a year or two, and that so will everybody else.  You will not want to live here, because there will be very few jobs, and they will be low paying jobs.  You will not be able to sell your house, because everyone else will be trying to sell their house too, and no one will have any money.  This all happened before in Dickinson, go read about it for yourself, and go ask old local blue collar workers.
  2. This is somewhat related to Reason #1, but I need to explain this separately.  I will begin by saying that the home prices are too high in Dickinson right now.  But let’s just say that you find a home that you like for $350,000 right now, and that this price seems fair.  Reading about the history of Dickinson, and talking to old local people, you find out what happened after the Oil Boom of the 1970s.  Based on what happened in the past, this house that you bought for $350,000 right now, two years from now if the oil field work has continued to decrease, you might not be able to sell this house for $180,000 because everyone else will be trying to sell their house too, no one will want to live here, and no one will have any money.  It is not that your house is worth so little money, it is that no one wants it, everybody wants to leave.  Do you want to lose that much money?  Are you prepared to leave the state and rent your house out?  Is your house the kind of property that you could rent out?
  3. There is a 50% chance that the price of oil will climb, will remain high, and oil drilling operations will begin again in North Dakota.  You can go and read for yourself news articles from all the different oil companies where they state, “In order for our company to begin again with drilling operations, the price of oil would have to climb to over $60 per barrel and remain there for several months before we would take any action.  Then, at that time we would begin bringing personnel back in all areas of operations.  It would take nine to twelve months to get enough personnel back to resume full operation.”  What this means to me, is that as long as the price of oil is low, employment in North Dakota will not increase. There will continue to be new apartment buildings with occupancy rates of 30%.  Apartment rents will continue to decrease, consequently house rents will continue to decrease.  There is no justification for home prices to remain high, other than wishful thinking of the homeowners and real estate agents.  Where are the owners of these houses that are for sale?  Are they still making high wages in the oil field, probably not.  How long can they afford to pay $2,000 to $3,000 per month mortgages, not forever, because if they could afford to wait, they would just wait for the Oil Boom to come back and make a profit.  They are not waiting because they can’t wait, they need to sell, more and more each day as they keep having to pay their mortgages, and new apartment rents become lower and lower.  A buyer right now can afford to wait for prices to drop in Dickinson.  A buyer should look at everything that is available, know what is available, and wait.  If the price of oil climbs for several months, and remains high for several months, and oil companies begin increasing their personnel, that might be the time to consider buying a house if you plan on staying in Dickinson and the oil field may be busy for more than a couple of years.  But you will have several months of advance warning before you have to decide whether to buy or not.
  4. Since you don’t have to hurry up and buy anything right now,  Keep Looking.  I would not only be looking for my ideal house, I would be looking for something that might be a really good deal.  This good deal could be a house closer to Belfield, South Heart, Richardton, or Gladstone, that may have so much land, have such a good view, or be so low priced that you feel it is too good to pass up.

To answer your question about real estate agents, property managers, and property investors gouging people.  Prior to 2007, there were three bedroom/two bathroom older homes in Dickinson that sold for $30,000 to $40,000 and rented for about $400 to $600 per month.  Retail workers, restaurant workers, construction workers, and retirees lived in these homes.  By 2011 these rents had increased to $3,000 per month, about five to six times what they had been.  The retail worker and restaurant worker wages increased by maybe 40%.  The construction worker wages increased by maybe 50% to 60%.  The retiree income might have increased by 5%.  But the rent increased by 500%.

All over Dickinson, the price of goods and services increased.  Grocery prices might have increased 15%, car repair prices might have increased 15% to %25.  Everybody could understand 15% to 25% price increases, but not the 500% housing price increase.  Everybody who moved to Dickinson to work was angry about the cost of housing and being ripped off.  Everybody who moved to Dickinson decided right away that as soon as the Oil Boom was over, they were leaving.  No one wanted to stay or could afford to stay after they lost their oil field job.  The real estate agents, property managers, and property investors might have been able to gouge people for about five years, but the people got gouged so bad that they all left, and now nobody wants to live here.  All the other business owners have the real estate agents, property managers, and property investors to thank for ruining what could have been permanent growth of the area.  All over the United States for the next fifty years, people will be talking about how bad North Dakota was, and really most of everybody’s bad experience was being gouged on housing.

Trying To Change Things In Dickinson And Watford City, North Dakota

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In my blog posts I have written about: The Dickinson Mafia, Dickinson State University, Dickinson Police Department, Dickinson Chamber of Commerce, Watford City Chamber of Commerce, Watford City Police Department, Belfield, Gladstone, Catholics, Bohemians, Black People, Mexicans, Real Estate Agents, Property Developers, Property Investors, White Trash, Jessie Veeder, Dan Porter, Kristi Schwartz, Bill and Kamal Patel, Outlaw Sippin Band, Codi Miller, Marinna Marsh, Eric Smallwood, Bigfoot, UFOs, women, bartenders, prostitution, restaurants, and that arrogant Mexican who owns that Mexican restaurant.

Many people are mad at me.  I will suffer some negative consequences as time goes by and people figure out that it is me who wrote these things about them.  There are at least three things that I accomplish when I write about Dickinson and Watford City:  I give the readers from out-of-state a better understanding of what is going on in western North Dakota; I point out things to the local readers that they might want to think about, consider, and change; and I cause the local people who are directly involved to think about what they are doing and maybe change what they are doing.  It is worthwhile to me to give truthful information to people from out-of-state to save them from having problems, and to try to cause some things to change in Dickinson and Watford City that will benefit everyone.

There are some things that I write about, that no one else addresses in public, and the Dickinson Press newspaper will not write about.  There are some things that I write about, that no one thought needed to be written about.  The following are some subjects that I have written about that I still think are important:

  • The Dickinson Mafia.  The Dickinson Mafia exerted beneficial control over development in Dickinson.  The town of Dickinson is very organized and clean, even though it just went through an Oil Boom.  However one of the things that the Dickinson Mafia should have done was grab hold of all the Real Estate Agents and Property Investors by their necks and said, “You are not going to fuck up this beneficial growth of Dickinson by ripping off all these people so bad, that they can’t wait to leave here when this boom is over!  Do you understand that you are going to ruin the whole economic future of Dickinson for years to come with your short-sighted gouging that is only going to last a couple of years?”
  • Dickinson State University.  I quit going to the West River Community Center in 2013 because of all the hoodlum street thugs, which were here in Dickinson because they were brought here by DSU.  Everybody in Dickinson noticed this, where did all these inner city street street thugs come from?, my God, it’s DSU that is recruiting them here!  In about 2015, I think that Dickinson State University quit doing this, because I don’t see as many hoodlum street thugs in Dickinson as I used to.
  • Dickinson Chamber of Commerce and Watford City Chamber of Commerce.  At first, the Dickinson Chamber of Commerce and the Watford City Chamber of Commerce did not want to allow my blog on the first page of Google search results, but now they don’t fight with my blog as much.  Probably, the Chamber of Commerce wants people from out-of-state to know that housing prices are very high, that most people who come to North Dakota to work will not make $100,000 per year, that it is very cold for about seven months each year, and that there is no homeless shelter.
  • Jessie Veeder.  Jessie Veeder is a singer, writer, and photographer from Watford City.  I wish that she would write about Watford City and North Dakota exactly how it is, not how she wants it to be.  She should know from her grandparents, parents, and old people in Watford City how hard life in North Dakota had been, how poor people were, and how much of a struggle it was to survive.  It is very important that people in North Dakota know and never forget how hard and difficult it was for people up until this most recent Oil Boom.  People here need to know this so that they conserve everything they have, don’t waste anything, and don’t live foolishly.  There has been about a twenty-five year gap between Oil Booms in North Dakota.
  • Women, bartenders, restaurants, and prostitution.  It took me a while to catch on, but I am now 100% certain, that the single women who came to North Dakota to work had something wrong with them.  There are jobs in human resources, nursing, administrative assistant, banking, retail, hotel, bartending, and waitressing, everywhere in the United States.  A woman could make more money in these occupations in Florida, Texas, New York, Arizona, or California and live in a more comfortable and better social environment.  With the cost of housing in western North Dakota, there was no financial advantage to women in these occupations to move to North Dakota.  The thing was, they were so fucking crazy, that they could not get a job in Florida, Texas, New York, Arizona, or California, a background check or even just talking to them for five minutes would reveal that there was something wrong with them.  In North Dakota, there was a shortage of workers, so employers didn’t do much of a background check or much of an interview to exclude crazy people.  In addition to the extremely cold weather, very high housing prices, lack of things to do, and shortage of women, when you did go to a restaurant or a bar, the women servers were crazy and had something wrong with them.  I argued and argued in this blog that prostitution should have been allowed in western North Dakota due to the shortage of women.  I argued that housewives didn’t want truck drivers, construction workers, and oil field workers trying to solicit them everywhere they went.  But I was wrong about prostitution, if all the waitresses and bartender women had something wrong with them, I can’t even imagine how horrible the prostitutes would have been.

 

Reasons Why I Dislike Property Investors, Property Managers, and Real Estate Agents

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In many of my blog posts I have expressed anger towards property investors, property managers, and real estate agents in Dickinson.  I want to explain this.

People need to have food, clothing, and shelter.  These are necessities that people must have.  I believe very strongly that it is wrong for individuals to try to buy up necessities intended for other people, so that they can then overcharge for these necessities.  In other words, I think that it is absolutely wrong for anyone to come up with any type of scheme to buy up, control, inflate the price, and over charge for basic necessities that would normally be inexpensive if it weren’t for greedy people trying to manipulate supply, availability, and prices.

Just because a person can conceive to do something, and then go do it, does not mean that it is right.

During the 1700s and 1800s, people went over to Africa and caught blacks, sold them as slaves, and then forced them to work for free.  In the United States we already argued, fought, and had a Civil War over this.  Now, 99% of people believe that you can’t catch other people and own them.  But, if there wasn’t a law against it, people would still be trying to catch and own slaves in the United States, because some people are so greedy, they disregard right and wrong, moral and immoral, just and unjust, like the Property Investors, Property Managers, and Real Estate Agents here in Dickinson.

In the 1800s and early 1900s, children as young as 8,9,10 years old, worked in factories, twelve hours a day, seven days a week, in dangerous and unsafe conditions.  To many business owners, there was nothing wrong with this, that is why they did it in the first place.  Even to this day, business owners like to say, “Supply and demand, free markets, let the market place decide, capitalism.”  Letting business people do what they want, resulted in slavery, child labor in factories, 12 hour work days every day of the week, unsafe and dangerous work conditions.  If it weren’t for the Emancipation Proclamation, Child Labor Laws, Federal Wage Laws, and OHSA, all of the things that I just mentioned would be still going on today.

The scheme has also occurred to greedy business people, that they could buy up necessities, so that these necessities would not be available to other people, and then they could overcharge for them.  What would happen if wealthy business people bought all of the food, all of it?  What if the wealthy business people then decided that you should pay $2.50 for a can of beans, carrots, or peas?  This may happen one day, because there is no law against it.  But just because someone can do it, does that make it right?

In the beginning of the United States, single family homes were built for single families to live in.  Probably early on, some single family homes were occupied by renters.  Renters are easily subject to being taken advantage of.  In some areas of the United States, single family homes were occupied by share-croppers, which was even more perilous than being a renter.  Being at the mercy of someone else for your housing, existed from the beginning of the United States.  However, after World War II, people were nearly free from other people controlling their housing, and we could have stayed on that course, had it not been for greedy people getting involved.

After World War II, due to advances in manufacturing, technology, engineering, agriculture, and energy transmission, the standard of living in the United States was the highest it had ever been.  A husband could work outside the home for eight hours a day, forty hours per week, and he could afford to purchase a home for his family to live in, buy furniture, buy an automobile, and pay for all of his family’s necessities.  The same kind of business minds that brought us slavery and 10 year old children working in factories, went to work on how to take advantage of people.

Business people began to think, why not buy single family homes as an investment?  Everybody needs a place to live, why not buy single family homes, and charge more for rent than the mortgage payment?  As long as you can rent out a single family home for more than the mortgage, property tax, and insurance, it pays for itself, and in fifteen or twenty years, it will be completely paid for.  If this is the  case, why not buy ten single family homes, rent them out, and in twenty years, you will have ten homes that are completely paid off?  One reason not to do it, would be that you are driving up the single family home prices, and preventing ten families from owning their own home.

There is a saying, banks loan money to people who can prove that they do not need a loan.  There are people that have high incomes, that are able to pay for all of their necessities and still have a great deal of money left over each month.  They can prove to the bank that their own home is paid for, they have a large amount of money in savings, and that they have several thousand dollars of extra money each month after their necessities are paid for.  The bank is happy to give them a mortgage on several single family homes, they can easily afford the monthly payments, plus, they are just going to rent them out anyway, for more than the monthly mortgage.

A young husband and wife, with no savings, and not very good employment, is not able to make a down payment on a home or be approved for a mortgage.  This same husband and wife, as they become older, if they have had a period of unemployment or medical problems, they may still be unable to make a down payment on a home or be approved for a mortgage.  This same husband and wife in old age, have spent all of their earnings raising children and helping other family members, they may still be unable to make a down payment on a home or be approved for a mortgage.

I read a real estate investment book that was published in the 1980s.  In this book, there were charts of single family home prices in cities like Orlando, Phoenix, Oklahoma City, Omaha in the late 1970s.  The charts showed that in these cities, the average single family home price was approximately twice the average annual salary of an individual in that city.  The charts also showed that the monthly rents on the average single family home were slightly higher than the monthly mortgage amounts. So if you were a real estate investor, it made sense to buy as many single family homes in those cities as you could find.  This real estate investment book also pointed out, that as time passed, you would have more and more equity in your single family rental homes, and could use this equity to borrow against in order buy more single family homes.  Also, as time went by, prices on everything go up, if your mortgage payment on your single family rental home stays the same, and you increase your rent every year, your “positive cash flow” on each home increases every year.

When I was reading this real estate investment book that was published in the 1980s, it was 2005.  At that time, the average single family home price in places like Orlando and Phoenix was now three to four times the average annual salary of an individual in that city.  Why did the price of single family homes go from twice the annual salary of an individual to three to four times the annual salary of an individual?  I will tell you why, because all of the real estate agents and property investors that were fucking around in the single family home market trying to get rich, that made the price of single family homes double.

An ordinary single family home, is just a place for a working husband and wife to have kids and raise a family, in an ordinary neighborhood, where other working people are doing the same thing.  There shouldn’t be any reason for local attorneys, doctors, and dentists, to be trying to get their hands on as many ordinary single family homes as they can.  There shouldn’t be people in New York City and Los Angeles trying to buy as many single family homes as they can in Omaha, but that is what is happening.  The real estate agents take it upon themselves, to bump the listing prices on $100,000 homes in Omaha, up to $115,000, because the real estate investors in New York City and Los Angeles will still buy them, they don’t know, they don’t care that much either.  The working husband and wife who finally saved up enough to afford the down payment on a $100,000 home, ask,”What the fuck just happened?”, when the price goes up to $115,000 the next week.

Real estate agents like to help inflate the price of housing, because their commissions are based on the price of housing sold.  Real estate agents also like to help inflate the price of housing, so that they can tell potential buyers that they had better buy now, prices are climbing, if you buy now, your house will be worth 10% more in two years.  The prices of single family homes went up and up because there were so many real estate investors trying to buy multiple single family homes.  The real estate investors did not really care that the single family home prices were quickly rising, they thought that this was good, they would have equity in their homes more quickly, they went ahead and paid the high prices.  Ordinary working people that were desperate to own a home, went ahead and entered into huge mortgages that they could barely afford to pay, ridiculously high mortgages based on their modest incomes.

The housing crash came.  Many ordinary working people could not afford their ridiculously high mortgages on their single family home.  Due to slumping employment, many ordinary working people could not afford high rent.  Real estate investors that owned multiple single family homes, had some tenants move out, some tenants get behind on rent, some tenants negotiate lower rents.  Real estate investors came to be unable to afford the mortgage payments on multiple rental houses when tenants moved out or failed to pay rent.

Real estate investors never should have been involved in single family homes that were intended for ordinary working people to live in and raise families.  Real estate agents were willing accomplices in making single family homes unaffordable to ordinary working people.

If rich business people could do it, they would buy up all the food, all of it, and not let you have it unless you paid two or three times what it cost them.  They don’t care how much suffering they cause.

The real estate investors, property managers, and real estate agents in Dickinson did not care how much hardship they caused people in Dickinson during this past oil boom.  Rents on homes and apartments were increased to four or five times what they had been before the oil boom.  Wealthy people, people who owned property, real estate agents, property investors, property managers, they all lobbied and made sure that no man-camp or trailer park was built in Stark County, in order to ensure that there continued to be a shortage of housing, and no inexpensive housing alternatives.  I knew many people who slept in their vehicles, in the cold, in 2011, 2013, 2014, and 2015 because they could not afford to rent an apartment in Dickinson.  This is also why there is not a homeless shelter in Dickinson, the people with money in Dickinson didn’t want people to have any place to stay if they couldn’t afford to pay the extremely high rents.