Home prices have risen by 60 percent in the past decade in North Dakota. That is significant wealth creation, particularly in light of the housing bust in many other parts of the country. A starting wage for an entry position at McDonalds or at a gas station in North Dakota is around $15 to $18 per hour. A booming state economy has made the minimum wage a non-issue. The same booming economy has made home prices go in only one direction.
So what is going on in North Dakota? Very simply: oil. The state is on track to become the second largest producer of oil, behind Texas and ahead of Alaska. North Dakota is now producing 450,000 barrels each day. The global daily demand for oil is 80 million barrels. North Dakota’s part, therefore, is minor by comparison in terms of shaking the global oil market. Still, the oil production is translating into a $40 million influx for this this tiny state’s economy every single day. It was producing just 100,000 barrels per day just five years ago.