SIOUX FALLS, SD (KELO) — The real estate market in South Dakota’s largest cities has exploded over the past two years with a more than 20 percent increase in prices since last year. Inventory remains incredibly low which has houses selling fast, often with dozens of offers.
While the competition is the highest in Sioux Falls and Rapid City, the rural real estate market is also changing.
“It just seems like these days it doesn’t really matter where it is, homes values are increasing and they’re selling and people are looking to move and they like to move to South Dakota,” Fischer Rounds Real Estate Broker Micah Volmer said. .
Small farming communities of just a few hundred people are scattered all across South Dakota, homes that historically had trouble finding a buyer.
“Historically buyers had a lot of the negotiating power in that market too, now it’s completely different,” Priority Real Estate & Development Broker/owner Christa Helma said.
“We had multiple offers within a week of listing,” Volmer said of a recent listing in Kimball.
That was unheard of just two years ago for listings in rural South Dakota, but Fischer Rounds Broker, Micah Volmer, says her rural listings near Pierre and Mitchell are now seeing far more competition.
“They are definitely selling a lot quicker than they used to,” Volmer said.
For example, this starter home in Alexandria, a community of just 800 people, sold for $115,000 last year after sitting 97 days on the market.
“It relisted just recently at $185,000 and after five days on the market, it’s already sale pending,” Volmer said.
That price tag is a big change for rural South Dakota where buyers used to be able to find plenty of housing options between $50,000 and $100,000, even just two years ago.
“Definitely when covid hit, it really changed for our rural areas, a lot of people wanted to get away from bigger cities,” Helma said. “A lot of people can work from home now.”
“A lot of people are able to move anywhere in the country and still continue to do their work. That’s what we’re seeing,” Volmer said. “A lot of people who are able to work from home are able to move into these smaller communities.”
The increased competition from more out-of-state buyers has caused usually steady rural housing prices to see a 20 to 25 percent increase in just one year.
“Average prices used to be $80,000 to $90,000 now you’re looking at an average sale price of $130,000 in these rural communities,” Volmer said.
“There’s a lot of talk out there on how it’s hard for more of the local people to afford these places because of the market competition,” Helma said.
Land prices are also up nearly 25 percent, not just for agriculture, but also with more people looking to build in these rural communities.
While rural real estate home prices are rising, Priority Real Estate says you can still get more value for your money in communities roughly 40 miles or more outside of Sioux Falls.