Deep-red Midwestern state sees home prices soar thanks to oil boom

A boom of oil production within a deep-red Midwestern state has seen house prices soar and unemployment rates drop as a surge of newcomers trigger a record high population. Officials in North Dakota once needed to entice people to the state, but interest has skyrocketed since the oil industry took off over the past decade.

The once deserted area is now thriving but climbing house prices have resulted in some residents struggling to put a roof over their head. Last year, the average value of a home was around $200,000 - up more than 20 percent from 2011. 'Houses have appreciated statewide and inventory is low in the whole state,' Beck told the Associated Press . 'That comes as a shock to a lot of people.'

According to data from the North Dakota Association of Realtors, the average sale price of a home in the Flickertail State last year was $201,991. In 2011, the average price of a home was $168,105. The oil boom came just a decade after the state struggled with its population, but after officials funded job fairs across the country to entice residents to move there, people quickly flocked.

Presently, the Midwestern state- home to Badlands National Park- has a record population and the lowest unemployment rate in the US with about 20,000 unfilled jobs. With the influx of newcomers, the state has struggled to house everyone. 'Young families are being priced out of the state,' Beck said.

'I've heard stories of an entry-level home being listed at night and there were 10 clients lined up in the driveway the next morning to see it.' Other than home prices rising, rent prices have also taken a toll on residents. A recent study found that Williston- a city with a population of about 29,160- had the highest rental prices in the nation, with a one-bedroom apartment going for approximately $2,400 a month.

In Dickinson- another largely populated city in North Dakota- the average monthly cost of an apartment was $1,733, according to the study. The city of about 25,000 people ranked fourth in the country. In comparison, Jeff Zarling, the president of a business development firm in Williston, said a two-bedroom in the city used to average at about $300 a month a couple years back. Zarling now believes housing costs have quadrupled in recent years.

When compared to commonly known expensive cities in the US, including New York and Los Angeles, both North Dakota cities had higher housing prices, the study found. Zarling said that many people have been trying to cut costs wherever they can, even if that means living with others. 'You're lucky if you can find anything under $300,000. What this is really causing is people are becoming roommates,' he added.

Low-income residents and seniors are also in trouble as the populations have grown beyond what the state can handle, Jolene Kline, executive director of the North Dakota Finance Agency, revealed. North Dakota's Housing Incentive Fund - a state-funded financing program that uses private and federal dollars to build affordable homes- will only be able to fund around 650 units this year, but Kline said that's not nearly enough.

'We're 3,000 short. Everybody needs to be very concerned,' she warned. While the low-income and middle-class continue to struggle to find homes in the state, wealthy residents have found themselves with more options. A six-bedroom home with an indoor pool and 16-seat movie theater in Fargo has been listed for $2.8million. The massive home last sold in 2007 for $1.8million.

In the small town of Grassy Butte, a 2,000 square-foot home that includes a second rental home, is listed for $2.8million as well. According to the listing, the new owners will get $18,500 a year 'from oil company surface damages,' AP reported.

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