Real estate developers were too late to the party in North Dakota.
Just a few years after fracking sparked a shale oil frenzy that lured thousands of unemployed workers to North Dakota in the hopes of landing high-paying jobs, plummeting oil prices have sapped some oomph from the boom.
As workers streamed into North Dakota, temporary camps popped up to meet the demand, and real estate developers followed suit with plans to create thousands of permanent apartments.
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But crude oil prices have fallen more than 50 percent in the past year. In response, the region’s drilling-rig count has fallen to a six-year low, Bloomberg reports. The average occupancy rate in the once booming municipality of Williston is now 65 percent. Even so, there are another 1,300 units in the pipeline for construction.
“We are overbuilt,” Williston County commissioners Dan Kalil told Bloomberg. “I am concerned about having hundreds of $200-a-month apartments in the future.”
That’s a far cry from the more than $2,000 monthly rent apartments were fetching at the height of the boom.
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After seeing its population grow faster than any other place in the country for three years in a row, Williston’s population shrank 6 percent in the past year, Reuters reports.
Still, the unemployment rate is less than 2 percent, and some still see a long-term upside. “We think the local production of oil is here to stay,” developer Israel Weinberger told Bloomberg. “Yes, prices have dropped, but it’s a commodity and commodities fluctuate. There is always a risk.”