Real Estate Q&A with ND Guaranty and Title President, Nick Hacker

Home purchases and business real estate transactions are typically a strong indicator of the health of the economy. Those impacted go beyond realtors and closing companies to construction, remodelers, renters, retail, etc. With the onset of the pandemic, there was a real concern about instability to this sector and the potential of a dive similar to what was seen the Great Recession, when the housing market bubble popped. However, the response has been temperate and the numbers speak for themselves. Bismarck and Fargo markets report increases as 2020 progresses. House prices have not fluctuated but rates have dropped creating options for buyers.

GNDC visited with ND Guaranty and Title Company President, Nick Hacker for perspective into what he is seeing. We asked him about current trends (see video), new operating practices for pandemic closings, and projections and rates as the summer comes. 
 

GNDC: How has the COVID-19 pandemic affected the real estate industry?
Hacker: Many of our team, about 30%, have worked from home, which has had a lot of impact on our business operations. One difference for us is that our business actually increased. It was challenging to migrate employees to work from home at a time when our volume going up. We had to come up with innovative ways to conduct real estate closings. It is a big stack of paper that we present to customers to sign for their home loans or real estate purchases. Of course, this is usually done in person. With the threat of COVID, our industry moved quickly. As a matter of fact, we were one of the first states to do what we call “curbside closings.” We organized with offices across the state and put together a plan that allowed the public to sit in their car with that stack of paper and our team went over the documents by phone. This allowed for the safe exchange of the documents. It was a challenge to make that as efficient and consumer-friendly as possible. We received many positive comments from people who thanked us for not requiring them to come into our office. Consumers had concerns and they were pleased with the way our team handled it.
 
Do you have a forecast for real estate or interest rates for the summer?
There is a need for inventory. The pandemic caused people to not list their homes for sale. That is coming back, but that inventory was effectively shut-in even though there were still buyers out there. From a supply standpoint, having the right kind of inventory available for buyers is going to be important in the next twelve months. I don’t have a crystal ball to talk about interest rates, but we do not expect any major shifts. Interest rates are probably at the bottom, I would be surprised to see them go below where they are today. The average rate today on a 30-year fixed mortgage is 3.4%. Commercial rates are also very low. Although delayed by the pandemic, buyers are taking advantage of these low rates and we are confident that the spring and summer buying season will come along. A concern for our industry is the level of unemployment. If we see unemployment rates above 10% for a prolonged period, that will begin to impact real estate. The whole state economy will struggle. People will not buy new houses and they won’t make investments. If high unemployment continues, we would expect to see minor price declines later next year.
 
Is ND following trends of the nation or are we unique?
From our business volume standpoint, we are in line with the rest of the country. The exception is in the oil patch. We have seen a hiccup in the oil and gas markets and that has affected our business in that part of the state. This is also evident in Texas and Oklahoma. All the oil markets are responding similarly. There were instances where the loss of a job caused a purchase to not go through, but things have begun to stabilize in the oil patch areas.
 
What advice would you give to someone leery about the economy and real estate markets right now?
This one is really easy - they don’t make more dirt! Seriously with low rates this is a great time to consider your options. Prices are stable and not over-inflated. Now is a good time to buy.
 
You and your staff have been utilizing GNDC resources throughout the pandemic and are a member of the GNDC Board of Directors’ Executive Committee – can you share what you tell people when they ask about the state chamber?
We have really enjoyed the webinars. Many members of our leadership team have been on the calls and webinars. Our HR department loved the two-part series with Ogletree Deakins. They got great advice on what to do if staff lost daycare or had to care for someone who was ill. With the uncertainty that came with programs that were launched before the guidance was written, GNDC was fantastic in helping us to navigate the dynamically changing business finance pieces of the CARES Act. Also, the engagement with Senator Hoeven and Senator Cramer so that we could better understand, at a high level, where the country is headed was appreciated.