#RuralBound: How the Coronavirus Pandemic Has Shaped Minnesota’s Rural Housing Market
It’s no secret the coronavirus pandemic has impacted many facets of our lives. Businesses and much of the population have had to find new and innovative ways to pivot in response to COVID-19. While many industries in the U.S. suffered through economic shutdowns, the housing market remained open and busier than ever. Throughout the last several months, new housing trends have started to emerge. Perhaps one of the most surprising is the recent rural bound movement.
What is the Rural Bound Movement?
The rural bound movement, also known as the Great American Migration of 2020, is a departure of city-dwellers to the country. So, why are people moving to rural areas? There are various factors, but many experts agree that the coronavirus pandemic has played a major role. Before the first wave of the virus hit last March, American migration was reported at a 73-year low. Census statistics show that just 9.3% of the population changed locations annually.
Since the pandemic began, the national housing market has seen significant growth, with sales data indicating much of that growth has taken place in rural markets. Bankrate reported that the number of mortgages obtained for homes in non-urban areas increased by 36% in 2020. This data, as well as that reported by the National Association of Realtors (NAR), suggest that more buyers are looking to trade the hustle and bustle of city life for a more laid-back lifestyle offered by rural areas and small towns.
The Impact of COVID-19 on the Housing Market
As of November 2020, Minnesota experienced a nearly 10% increase in home sales over the previous year. Much of that increase was in rural parts of the state, as well as known vacation areas like the North Shore of Lake Superior.
“...Consumers [are] buying second homes in rural areas, especially cabins, with funds they would have used on trips — especially foreign travel — pre-COVID,” says Chris Ghaller, CEO of the Minnesota Association of Realtors (MAR).
Located in the heart of lakes country, Fergus Falls is one of the rural areas that has experienced an uptick in home sales since the pandemic began. “The housing market in our area, like the rest of the United States, has seen record numbers of home sales in 2020,” confirms Ryan Hanson, a local realtor Ryan Hanson Homes - Keller Williams Realty. “Thankfully, our local market did not suffer at all,” adds Century 21 realtor Leslie Flugstad. “I was insanely busy throughout the whole summer, and though inventory was a bit low, the sales were really record-breaking.”
Historically, realtors in the Fergus Falls region have seen a mix of buyers from eastern North Dakota, central Minnesota, and the Twin Cities Metro. Although that is still the case, Flugstad and Hanson say they’ve seen an influx of newcomers from different parts of the country. A large number of Flugstad’s latest clients have come from the western U.S., including Montana and California. On the other hand, Hanson says he’s had more conversations with people from southern states looking to purchase vacation homes than typical.
What’s Driving the Rural Bound Movement?
When it comes to the housing market's biggest influence, it’s easy to point to historically low interest rates. While that’s certainly a factor, Flugstad and Hanson say there are other reasons motivating buyers to trade in city life for rural areas, including:
A desire to be closer to aging relatives
Recent civil unrest in larger cities
Escape from densely populated cities where health risks are higher
Lower cost of living
Outdoor and recreational opportunities
Of those listed above, one of the most significant factors influencing the rural bound movement is an increase in remote work opportunities. Stay at home orders caused many companies to transition to remote work shortly after the pandemic began, and experts believe this type of work is here to stay. Forbes Contributor Jeff Rose writes, “Even after the crisis subsides, remote work may be established as a preferred work style for both employers and employees. That will act as an equalizer for the rural areas since geography is less important in work-at-home arrangements than it is for on-site jobs.”
The Fergus Falls region is particularly appealing to those looking to achieve a better work-life balance and slower pace of life. “More opportunities for remote work make it possible to be on a conference call with people from all over the world, and within 10 minutes, be able to jog through one of our many city and state parks, or meet friends or family for drinks or a meal,” says Hanson. “Our commutes are measured in minutes, not hours, which is a big draw for people who have spent a substantial amount of time in traffic during morning and evening commutes.”
In addition to a high standard of living, the region is home to an array of recreational, educational, and cultural opportunities for visitors and residents to enjoy year-round. A robust business community and central location make it easy to take advantage of various shopping, dining, and entertainment options in and around the area. “We see buyers and vacationers that appreciate the accessibility to amenities, regional airports, and the interstate while being distant enough to enjoy a less hectic and chaotic pace of life,” Hanson notes.
The benefits of living in Fergus Falls and the surrounding area speak for themselves, but it never hurts to spread the word. Local initiatives like Live Wide Open and the Otter Tail Lakes Country Association (OTLCA) are dedicated to doing just that. Driven by a common goal, both organizations are calling attention to all the things that make West Central Minnesota and Otter Tail County a premier destination to live, work, and play.
The Future of the Rural Housing Market
With the virus still in play, there’s no telling what 2021 will bring. Nevertheless, both Hanson and Flugstad are confident that the housing market will continue to flourish over the coming months.
“[People] love the outdoor opportunities, smaller community lifestyle, and the price of homes here,” Flugstad says. “When people are working remotely and can live where they want, and they choose our area, it really shows that the secret is out: our area is the best place to live!”
Our team at Greater Fergus Falls has to agree! Whether visiting for the weekend, purchasing a vacation home, or relocating permanently, Fergus Falls has a lot to offer. Thanks to Ryan Hanson and Leslie Flugstad for sharing their insights about the rural bound movement!