NORTHERN HILLS — Gov. Kristi Noem’s decision to keep South Dakota open amidst the COVID-19 pandemic has caused the Northern Hills housing market to boom.
Jason Tysdal, president of the Mount Rushmore Area Association of REALTORS, said when the pandemic first swept the nation and governments started to shut states down, the real estate market slowed a bit as people tried to determine how to react to the crisis. But it wasn’t long before people started to notice South Dakota as a state they wanted to live in.
“After the first week, our real estate market revved up,” Tysdal said. “We started getting calls all over the place. Then, further into it, we started getting calls like ‘we’ve been thinking about moving for quite awhile and this is putting us off the fence right now and we want to get here. So, now it’s busy, especially with tourist season.”
Tysdal said in previous years the attractions of the Black Hills would be the primary focus for most visitors. But in 2020 they appear to be driving around, taking back roads, and calling the numbers on the realtors’ signs. Their reasons for wanting to move here range from South Dakota’s lack of income tax and lower cost of living, to more political leanings.
“Their bars and restaurants and shops and all of that are being shut down,” he said. “They like what South Dakota did by not shutting down. Most of what we’re seeing is people who have been looking at the Northern Hills or western South Dakota for some time. Or, they’re seeing articles in various magazines. Some of it came from us not closing down and the publicity that Kristi Noem has gotten.”
Growing industry, cultural activities, and recreation opportunities have also been factors in the booming housing market, he said. “We just have a lot to offer,” he said.
Of the growing numbers of out of state buyers, Tysdal said a small percentage of people are in such a hurry to get out of their state and into South Dakota, they are buying properties without actually visiting them first. Technologies such as Facetime and Zoom have allowed sellers to show and sell their homes to people before purchasers are able to travel.
“I think that’s a dangerous way to do it,” he said, cautioning all buyers against committing to purchases for properties they have not physically seen. “Some people insist on wanting to do it, and they just buy it and deal with (problems) later. You’re better off being able to have a contingent on viewing it at some point. I think you are better off seeing it, because you can only see so much with a video.”
Interest rates are also a major motivation for buyers. Tysdal said while interest rates vary, right now they average from 2.75-4%. Those rates are also causing people who already live in the Northern Hills to take a fresh look at upgrading housing and land holdings.
Overall, Tysdal said every kind of property in the Northern Hills, whether it is single-family homes or acreage, is selling like crazy. In a market that definitely favors the seller, he said it seems realtors need more listings to meet the demand.
“Everything is moving,” he said. “If you have a decent home, priced correctly, then the homes are getting purchased.”
Buyers are not only purchasing more properties, but they’re typically paying more for them too. According to statistics from the Mount Rushmore Area Association of REALTORS, at this time in 2019 the average price of a single family, existing home was at $268,000. In 2020, that price has jumped up to $305,000. For new construction people paid an average of $330,500 per house in 2019. In 2020, that figure jumped up to $382,000.
While Tysdal said his office does not distinguish between lot sizes or multiple acreage sites when taking statistics, the average piece of land in the Northern Hills sold for about $78,800 in 2019, and in 2020 that average went down to $74,500. However, he said those averages could be deceiving since realtors have a variety of listings that range from half-acre lots to five, 10, 40 and more acres of land. That variety makes it harder to track average price statistics for land.
“That’s been big on the inquiry list, people looking for acreage,” he said. “Land is appreciating and staying fairly steady. It’s increasing a little bit because we’re running out of buildable lots closer to downtown areas. Some of your outer areas of subdivisions are getting bought out. We are going to be in need of some lots here.”
Overall, Tysdal said people are enjoying the land in the Northern Hills, and everyone seems to want a piece of this beautiful country.
“They’re a saying that they’re not making any more of it, so a lot of people don’t mind buying it and sitting on it,” he said. “The word has gotten out. So people who have seen the area are coming here, and they’ve decided that this is a great place to live.”
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