Published March 28 2011
Aside from flood buyouts, real estate action slow on Red River
She knew the risks of living next to the river when she and her husband bought their north Fargo home last summer. After all, she grew up just down the block in the Woodcrest Drive area.
But the home’s price, proximity to north Fargo schools and ability to accommodate their three children suited their needs. More so, Mineer said, she was drawn to the beauty of the sprawling wedge-shaped lot, which stretches longer than a football field on three of its four sides.
“I wish I could enjoy it a little more right now,” she said last week.
The Mineers are among just a handful of homebuyers who have chosen locations on the river since the record river crest of March 2009.
Fargo City Assessor Ben Hushka said a quick search by his office found only one sale of a house on the river since Jan. 1, 2009, that wasn’t a flood buyout – now the Mineers’ home.
Moorhead had four such sales during the same time period, including one in February 2009, City Assessor Nancy Gunderson said.
As the river brims with potential for a third consecutive major spring flood, action remains slow in Fargo-Moorhead’s riverfront real estate market.
As of last week, there were six homes with Fargo addresses listed for sale along the Red River and four along the river in Moorhead, according to a Forum review of the Multiple Listing Service map on the F-M Area Association of Realtors’ website. That doesn’t include homes for sale by owner.
Three of the Fargo homes had a strip of Fargo Park District land between their property and the river.
In addition, there were nine riverfront residential lots for sale in Fargo and two in Moorhead.
Homeowners living on or near the river who put their homes up for sale are finding more discerning buyers, said LuAnn White, president of the Realtors association.
“Obviously, with this being the third consecutive year that we’re concerned about a flood, buyers are certainly more knowledgeable … about properties that would be in the floodplain,” she said. “They are doing their due diligence, I think, in that regard probably more than they have before.”
Riverfront homes make up a small fraction of the F-M area’s overall housing stock, and that percentage has been shrinking with buyouts, which helps explain the small number of sales, she said.
Flood buyouts have comprised the majority of riverfront real estate activity in the past few years.
Since Jan. 1, 2009, the city of Fargo has acquired 61 homes, including 16 so far this year, with another four or five possible in the next two months, Assistant City Attorney Butch McConn said. Moorhead has purchased 102 properties as flood buyouts during that same time period, Gunderson said.
Not all of the homes were riverfront properties. For example, in Fargo, five were on legal drains and Rose Coulee, two were on Southwood Drive next to the Fargo Country Club golf course and six sat on property near but not on the river, McConn said.
The city of Fargo is compiling a report on how flood buyouts have affected the city’s property tax base, but it’s not finished yet, Hushka said.
Hushka said the lack of river home sales has made it harder for appraisers to find comparable sales for setting home values.
People who live along the river realize they’re going to have to deal with occasional flooding and potential homebuyers also take that risk into account, said White, a Realtor with Coldwell Banker First Realty.
In addition, they want to know if the property will fall into the 100-year floodplain when the Federal Emergency Management Agency releases its revised flood insurance rate map. Homeowners with mortgages in the floodplain must buy flood insurance, adding to the expense of home ownership.
“I think that makes people a little bit more careful and cognizant of where the property is,” White said.
Resolving the uncertainty over the floodplain and permanent flood protection for Fargo-Moorhead would have “a huge effect” on the real estate market near the river, she said.
Mineer said they’ll build a sandbag dike as the previous owners did in 2009, but she does take some comfort in knowing the base of the house sits at a river elevation of 41.5 feet.
“So, it’s higher than a lot of the houses in this neighborhood,” she said. “Honestly, if our house goes, most of the neighborhood goes.”
Still, as the water rises, so does the level of second-guessing.
“Yes, I am definitely questioning my decision at this point – and my decision to live in this town altogether,” Mineer said.
Readers can reach Forum reporter Mike Nowatzki at (701) 241-5528