- Employment in Bakken Formation drilling counties up 35.9% from 2007 to 2011
- Wages in Williston, North Dakota, 62.6% higher than national average
- US housing sales up 18.5% on previous year’s estimate
Since the US housing bubble burst in 2006, leading to the spiralling credit and unemployment crisis which has become known as the Great Recession, America and Americans have been seriously suffering. However, newly released data indicates that, perhaps, the country is finally beginning to heal.
In April 2013 the US Census Bureau and the Department of Housing and Urban Development jointly released figures showing that sales of new, single family homes in March 2013 were 1.5% above the revised February 2013 rate and a massive 18.5% above the March 2012 estimate.
Further positive news was announced in May 2013, when the US Labor Department confirmed that the non-farm payroll job creation rate for April was 13.8% higher than economists has predicted and that unemployment country-wide had reached its lowest level in four years (7.5%). The news impacted swiftly on the markets, with the Dow Jones index reaching an historical high of over 15,000.
While the majority of the US is taking slow, tentative steps towards recovery, the state of North Dakota is racing ahead thanks to the phenomenon of the Bakken Formation energy boom. North Dakota now has the lowest unemployment rate in the US (3.3% in March 2013) and, according to the Bureau of Labor Statistics, employment in counties where drilling from the Bakken is taking place rose by 35.9% between 2007 and 2011.
Workers from across America are flocking to North Dakota, leaving behind their struggling home states in order to be part of the 40,856 direct and 18,700 indirect jobs created in the state since 2011 by the oil and gas industry (according to the latest data from the North Dakota State University’s Department of Agribusiness and Applied Economics). Oil workers are benefitting from rising wage rates as well as reduced unemployment. Although North Dakota’s average weekly wage ($872) is slightly below the country’s average ($906), in places such as Williams County where the town of Williston is located, the average weekly wage for the same period (third quarter 2012) reached $1,473.
With a new US Geological Survey estimating that the Bakken and Three Forks Formation actually contains twice the oil originally believed, and each well generating around $4.8 million annually according to the North Dakota State University, the Bakken’s black gold rush is set to continue attracting floods of migrant workers.
Despite generating such high wage rates and tax revenue of over $1 billion for the state in 2012, the sensation of the Bakken Formation is not without its problems. Robert Gavin, Director and Founding Partner of leading international investment company Property Horizons, explains,
“In North Dakota we are witnessing a desperate shortage of housing for the thousands of workers attracted by the oil boom. Workers are commanding high wages but being forced to sleep in temporary accommodation and even in their cars due to the lack of available property.”
For those whose families wish to follow them to the state, the situation is even worse, with migrant workers being forced to leave their partners and children behind as there is nowhere for them to stay. Thankfully Property Horizons is acting swiftly to address the situation capitalizing on foreign investor interest in the local housing shortage.
Its Horizons Ridge development in Williston, which is currently open for investment, will see 174 three and four bedroom single family homes built to house workers and their families. With two or three bathrooms, basements and double or triple garages, the homes will offer superior quality accommodation, with sale prices beginning at $270,000.
Buy-to-let investment opportunities are available, with predicted rental returns of 13-15% for corporate tenancies and leveraged cash on cash yields based on net rental profit as a function of the down payment will be around 50-60%, with financing available.
For more information on developments in North Dakota, call Property Horizons on +44 (0) 1908 888 999, visit www.propertyhorizons.co.uk or contact the team [email protected]