The Fargo real estate market has emerged as one of the hottest turnaround markets in the first-half of 2016. Home prices for Fargo real estate are up — growing relative to last year — while appreciation rates have outpaced the national average. Gains in the last three years have extended the trend of positive price growth since the recession, benefitting both Fargo real estate investors and homeowners.
Conversely, home affordability for the Fargo housing market remains among the lowest in the country. The local economy in Fargo continues to improve; unemployment remains below the national average, while employment growth is strong compared to other markets. Together, the Fargo real estate market is primed to experience a tremendous second-half.
Fargo, ND Real Estate Market Statistics:
Home appreciation is another factor working in Fargo’s favor. The first-half of 2016 saw one-year appreciation rates of 8.1 percent for Fargo real estate, compared to the national average of 4.9 percent. Three-year rates fared even better, as homes appreciated by 25 percent, whereas the rest of the country saw three-year appreciation rates of 17.8 percent. Price appreciation and principle payments in the last three years have boosted total equity growth since the recession. From an investor’s perspective, the Fargo real estate market remains a hotspot for home appreciation and total equity. For those considering Fargo real estate investments, the following highlights appreciation gains in previous years:
- Homes purchased in the Fargo, ND housing market one year ago have appreciated, on average, by $18,542. The national average was $14,963 over the same period.
- Homes purchased in the Fargo, ND housing market three years ago have appreciated, on average, by $49,854. The national average was $46,878 over the same period.
- Homes purchased in the Fargo, ND housing market five years ago have appreciated, on average, by $72,856. The national average was $82,353 over the same period.
- Homes purchased in the Fargo, ND housing market seven years ago have appreciated, on average, by $80,008. The national average was $77,054 over the same period.
- Homes purchased in the Fargo, ND housing market nine years ago have appreciated, on average, by $84,003. The national average was $31,126 over the same period.
The Fargo real estate market continued to see significant returns in the form of equity in the first-half of 2016. Homes purchased one year ago appreciated on average by $18,542, as opposed to the national average of $14,963. Furthermore, total equity gains for Fargo real estate have surpassed the national average every year for the last nine years except once, which bodes well for Fargo real estate investing moving forward. Thanks, in part, to low home prices and rising appreciation rates, Fargo remains a lucrative market for both homeowners and investors.
Another factor impacting the Fargo real estate market are foreclosures. The area continued to see a very low amount of foreclosures during the first-half of 2016, as Fargo has 87 properties in some stage of foreclosure during the month of October, according to RealtyTrac. Surprising, however, that number was 33 percent higher than the previous month, although it remained the same from the same time last year. While inventory for foreclosures remains low, they still represent unique opportunities for Fargo real estate investors and homeowners.
Fargo, ND Real Estate Market Summary:
- Current Median Home Price: $205,700
- 1-Year Appreciation Rate: 8.1%
- 3-Year Appreciation Rate: 25.0%
- Unemployment Rate: 2.7%
- 1-Year Job Growth Rate: 1.9%
- Population: 113,658
- Median Household Income: $46,311
Fargo, ND Real Estate Market (2016) — Q2 Updates:
The Fargo real estate market saw an assortment of factors work in their favor during the first-half of 2016. The median home price for Fargo real estate was $205,700 at the end of the second quarter, slightly below the national average of $239,167, but appreciation rates continued to exceed the rest of the country. One-year appreciation rates for Fargo real estate were 8.1 percent compared to the national average of 4.9 percent, while three-year rates were 25 percent compared to 17.8 percent. With home prices continuing to grow relative to last year, the Fargo real estate market is expected to further heat up in the second-half.
Aside from home prices and appreciation, another factor influencing the Fargo real estate market in a positive manner is the local economy. The unemployment rate for Fargo during the second quarter was vastly below the national average, recording a 2.9 percent unemployment rate in Q2 compared to 4.9 percent achieved by the rest of the country. Although unemployment has risen since the same period last year, Fargo’s labor market has been more resilient than the national average. Employment in Fargo has held up and is on an upward trend, as one-year job growth matched the national average at 1.9 percent during the second quarter. That said, local employment growth in Fargo is strong compared to other markets.
Other factors enhancing the Fargo real estate market include home affordability and new housing construction. As the bread and butter of the Fargo housing market, home affordability was exceptionally strong during the second quarter. Homeowners paid 8.4 percent of their income to mortgage payments in Q2, whereas the national average paid a whopping 15.8 percent. In fact, Fargo’s second quarter home affordability ratio is actually lower than its historical average of 9.8 percent. One element that could influence home affordability moving forward is new housing construction. The pace of construction in Fargo reached 45.7 percent above the long-term average in the second quarter, while single-family housing permits settled at 5.4 percent, compared to the national average of 10.6 percent. That said, new housing construction in Fargo is on the rise relative to last year, which suggest that local inventory has stabilized.
According to the National Association of Realtors, the Fargo real estate market is forecasted to experience weaker price growth in the next 12 months. Home prices for Fargo real estate are anticipated to grow by 1.5 percent, whereas the national average is expected to grow by 3.6 percent. The good news, however, is price expectations for the Fargo real estate market are more modest than a year ago. All in all, the Fargo real estate market remains one of the hotter markets in the country in terms of growth and appreciation.
