Money and workers are pouring into Williston, the capital of North Dakota’s oil boom, but the only department store in town is a JCPenney, with a facade straight out of the 1950s.

“We desperately need some kind of shopping center or mall here in Williston,” said Rev. Jay Reinke, a 20-year resident and pastor of Concordia Lutheran Church. “You have to drive hours to find decent shopping.”

That drive is not getting shorter anytime soon. Real estate developers are finding loans and investments hard to come by from Wells Fargo, private equity firm Carlyle Group and other major American financial powerhouses for new department stores and other commercial property, as well as residential developments.

While billions of dollars in oil money may be rushing into North Dakota, big money has resisted financing large real estate deals there, barring some projects entirely and leading other developers to self-finance.

Many would-be financiers say the North Dakota oil patch real estate market is too hot to handle right now, with demand for housing outstripping supply, fueling high prices. The average two-bedroom apartment in the oil patch rents for more than $2,500 per month, helping drive land prices sky-high and sparking concern about a bubble.

National homebuilders such as Pulte Group, D.R. Horton and Hovnanian Enterprises have yet to enter North Dakota. Pulte said it was focused on improving its market share on the East and West Coasts, as well as some Midwest states. The other two declined to comment.

Part of the hesitancy stems from the reluctance of energy-field workers to move their families full-time to North Dakota, a step that would cause them to spend more money locally. The state’s biting winter weather and remoteness have discouraged all but a few families, realtors say.

Data about home-building permits suggests workers are still keen to rent apartments rather than invest in housing and settle down. Only 20 permits were granted in Williston during the first five months of this year, compared to permits to build 482 apartment units, according to the city’s building department. As recently as 2010 the number of homebuilding permits in Williston, a city of about 16,000, far outpaced apartment permits.

“At first we thought we really had to run fast to get position in the homebuilding market, and now we see a landscape that frankly isn’t running away from us,” said Terry Olin, a North Dakota native now exploring real estate projects in the state with Switzerland-based investment company Stropiq LLP.

HISTORY IS A GUIDE

Many banks remain wary of the past repeating itself. North Dakota saw a surge of oil activity in the 1950s and 1980s, only to have the flare-ups burn out, leaving many residents, municipalities and banks in debt after funding large projects. Williston alone had millions in debt from the 1980s oil boom as recently as 2005.

“What we don’t want to do is go into a community like Williston and engage in speculative lending and not have an exit strategy,” said Dan Murphy, Wells Fargo’s regional president for North Dakota, South Dakota and western Minnesota. “We’re happy to make loans. We want to be repaid.”

The hesitancy comes even as Marathon Oil, Exxon Mobil, Statoil and dozens of other energy companies spend billions of dollars to extract North Dakota’s oil and natural gas.

Oil may be booming in North Dakota, but real estate is slow to follow – CSMonitor.com.