Top 5 Residential Real Estate Investment Markets in North Dakota

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By Trent Seigfried Updated May 29, 2024
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Edited by Michael Yessis

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Grafton is home to the best residential real estate investment market in North Dakota.

The 58237 zip code in Grafton presents the greatest opportunity for investors among the 80 individual real estate markets in North Dakota we evaluated. We looked at property values, population trends, and six other metrics for each market. We used that data to calculate each market's InvestScore.

Top 5 North Dakota residential real estate markets

RankCity InvestScore Affordability Property value appreciation
1Grafton1001.925.78%
2Wahpeton98.53.334.02%
3West Fargo97.43.328.27%
4Minot81.42.924.36%
5Valley City79.22.912.78%
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1. Grafton

We've identified the 58237 zip code in Grafton as North Dakota's best real estate investment market. Here's why.

πŸ”Ž Key data about Grafton

Data pointValueRank in state (of 80 markets)
Zip code58237N/A
InvestScore 100Highest
Typical property value $127,578[1]lowest
Five-year appreciation 25.78%[2]6th highest
Household income $66,050[3]11th highest
Affordability ratio 1.9most affordable
Five-year population growth -3.9%[4]18th highest
Unemployment rate 2.7%[5]9th lowest
Property taxes $1,522[6]2nd lowest
Educational attainment 17.3%[7]20th highest
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Grafton (zip code 58237) is the best residential real estate investment market in North Dakota. It has the 6th highest property value appreciation among markets we evaluated, with a 25.78% appreciation of the typical property over the last five years.

Grafton is the most affordable market among the 80 North Dakota markets we evaluated, with an affordability ratio of 1.9.

2. Wahpeton

The 58075 zip code in Wahpeton is North Dakota's second-best residential real estate investment market.

πŸ”Ž Key data about Wahpeton

Data pointValueRank in state (of 80 markets)
Zip code58075N/A
InvestScore 98.52nd highest
Typical property value $201,353[8]3rd lowest
Five-year appreciation 34.02%[9]the highest
Household income $60,451[10]14th highest
Affordability ratio 3.35th most affordable
Five-year population growth -3.1%[11]17th highest
Unemployment rate 2.3%[12]6th lowest
Property taxes $2,131[13]6th lowest
Educational attainment 23.7%[14]18th highest
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The 58075 zip code in Wahpeton features a typical property value of $201,353, the 3rd lowest in the state.

Property values have appreciated 34.02% over the past five years, the the highest increase among evaluated markets in the state. Wahpeton homes have an affordability ratio of 3.3, the 5th most affordable in the state.

3. West Fargo

The 58078 zip code in West Fargo comes in at No. 3 in our ranking of residential real estate investment markets in North Dakota.

πŸ”Ž Key data about West Fargo

Data pointValueRank in state (of 80 markets)
Zip code58078N/A
InvestScore 97.43rd highest
Typical property value $322,437[15]16th lowest
Five-year appreciation 28.27%[16]2nd highest
Household income $97,231[17]2nd highest
Affordability ratio 3.34th most affordable
Five-year population growth 16.8%[18]3rd highest
Unemployment rate 0.8%[19]lowest
Property taxes $3,680[20]19th lowest
Educational attainment 44.9%[21]4th highest
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With a typical property value of $322,437, West Fargo's 58078 zip code features the 16th lowest property values in the state.

West Fargo homes have an affordability ratio of 3.3, the 4th most affordable among the markets we evaluated.

4. Minot

The 58703 zip code in Minot ranks No. 4 among North Dakota's residential real estate investment markets.

πŸ”Ž Key data about Minot

Data pointValueRank in state (of 80 markets)
Zip code58703N/A
InvestScore 81.44th highest
Typical property value $235,830[22]7th lowest
Five-year appreciation 24.36%[23]8th highest
Household income $80,639[24]8th highest
Affordability ratio 2.93rd most affordable
Five-year population growth 1.4%[25]13th highest
Unemployment rate 4.9%[26]19th lowest
Property taxes $2,701[27]13th lowest
Educational attainment 33.5%[28]8th highest
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Property values in Minot's 58703 zip code have seen the 8th highest increase among evaluated markets in the state, with an appreciation of 24.36% over the past five years.

Minot's affordability ratio of 2.9 makes it the 3rd most affordable among the 80 markets we evaluated.

5. Valley City

The 58072 zip code in Valley City rounds out our top five residential real estate investment markets in North Dakota.

πŸ”Ž Key data about Valley City

Data pointValueRank in state (of 80 markets)
Zip code58072N/A
InvestScore 79.25th highest
Typical property value $168,114[29]2nd lowest
Five-year appreciation 12.78%[30]19th highest
Household income $58,803[31]19th highest
Affordability ratio 2.92nd most affordable
Five-year population growth 2.0%[32]11th highest
Unemployment rate 3.5%[33]14th lowest
Property taxes $1,795[34]3rd lowest
Educational attainment 30.6%[35]11th highest
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Property values in Valley City's 58072 zip code rose 12.78% over the last five years, ranking the city 19th highest among evaluated markets in North Dakota.

Valley City homes have an affordability ratio of 2.9, the 2nd most affordable among the markets we evaluated.

How we rank residential real estate markets in North Dakota

We evaluated 80 markets on eight metrics, and then assigned an InvestScore based on their weighted and combined rankings. Each market corresponds to a specific zip code in North Dakota.

What is InvestScore?

InvestScore is a score on a scale of 0 (worst in state) to 100 (best in state) that estimates the residential real estate investment potential of a given market. It takes into account a suite of key data points for each city.

  • Typical property value: This measures the typical home value in this zip code, according to the Zillow Home Value Index. It reflects the typical value for homes in the 35th to 65th percentile range, including all homes, with the numbers smoothed and seasonally adjusted. We prefer lower property values, which indicate both more room for growth and a greater ease of purchase. We assign a weight of 20% to typical property values.
  • Property value appreciation: This measures how much property values have increased in the area over the past five years, according to the Zillow Home Value Index. We prefer a higher appreciation, as it indicates better returns on housing. However, past performance isn't indicative of future results. We assign a weight of 20% to property value appreciation.
  • Median household income: This is the inflation-adjusted median household income in the zip code, according to U.S. Census American Community Survey data. We prefer a higher household income, as it indicates local residents have more income to spend on housing. We assign a weight of 10% to median household income. We assign a weight of 10% to median household income.
  • Affordability ratio: This is the ratio of the typical home value to the median household income in the area. A lower ratio is better because it means more households can afford a home, which indicates higher demand. We assign a weight of 15% to the affordability ratio.
  • Population growth: This is how much the area's population has grown over the past five years, according to U.S. Census estimates. Higher is better, as it indicates residents are moving into the area at a rapid clip. We assign a weight of 10% to population growth.
  • Unemployment rate: This is the unemployment rate in the area, according to U.S. Census data. We prefer a lower rate, as it indicates the availability of steady employment in the area, meaning residents will find it much easier to afford homes. We assign a weight of 15% to unemployment rate.
  • Property tax: This is the median real estate property tax paid in the area, according to U.S. Census estimates. We assign a weight of 10% to property tax.
  • Educational attainment: This is the percentage of residents in the area that have obtained a bachelor's degree or better, according to U.S. Census estimates. We prefer a higher rate because it indicates  local residents who have higher earning potential and thus should be able to afford homes. We assign a weight of 15% to educational attainment.

Disclaimer: The information contained in this article isn't intended as, and shall not be understood or constituted as, financial advice. The information in this article isn't a substitute for financial advice from an investment professional or real estate agent who is aware of the facts and circumstances of your financial situation or the specifics of any individual property.

Article Sources

[1] Zillow – "Zillow Home Value Index". Updated March 31, 2024.
[2] Zillow – "Zillow Home Value Index, difference over last five years". Updated March 31, 2024.
[7] U.S. Census – "U.S. Census Table S1501 - Educational Attainment 2018-2022". Updated 2018-2022.
[8] Zillow – "Zillow Home Value Index". Updated March 31, 2024.
[9] Zillow – "Zillow Home Value Index, difference over last five years". Updated March 31, 2024.
[14] U.S. Census – "U.S. Census Table S1501 - Educational Attainment 2018-2022". Updated 2018-2022.
[15] Zillow – "Zillow Home Value Index". Updated March 31, 2024.
[16] Zillow – "Zillow Home Value Index, difference over last five years". Updated March 31, 2024.
[21] U.S. Census – "U.S. Census Table S1501 - Educational Attainment 2018-2022". Updated 2018-2022.
[22] Zillow – "Zillow Home Value Index". Updated March 31, 2024.
[23] Zillow – "Zillow Home Value Index, difference over last five years". Updated March 31, 2024.
[28] U.S. Census – "U.S. Census Table S1501 - Educational Attainment 2018-2022". Updated 2018-2022.
[29] Zillow – "Zillow Home Value Index". Updated March 31, 2024.
[30] Zillow – "Zillow Home Value Index, difference over last five years". Updated March 31, 2024.
[35] U.S. Census – "U.S. Census Table S1501 - Educational Attainment 2018-2022". Updated 2018-2022.

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