Real estate market booming

If the COVID-19 pandemic was supposed to cause the complete collapse of the U.S. economy, somebody forgot to tell the Black Hills real estate market.

While it is true the pandemic has sent the U.S. into the worst recession since the Great Depression and costs thousands their jobs and homes, there are those who are buying new homes as the pandemic unfolds, and many of those are buying those homes in Custer County, and throughout the Black Hills and entire region, for that matter.

Local real estate agents and owners say they are seeing many people flee metropolitan areas, whether because of COVID-19, restrictions put in place or social unrest that has rocked large cities for months. The proponderance of people working from home, low interest rates and a general lack of inventory are all other reasons it’s a seller’s market.

“In the last six months, so many people have figured out there are a lot of jobs at which they can work from home and you can live anywhere on earth,” said Craig Reindl, owner of Western Skies Real Estate. “They want to distance themelves, so we are seeing people come here.”

“They want to get out of metro areas,” said Ramona Flaig of Custer Real Estate. “They want to get out of the big cities and riots. Young families are reaching out and trying to move here. They can work from home and are working from home.”

Faith Lewis at Lewis Realty/Keller Williams agreed, saying people are “coming here to get away from where they are.” Lewis said New York City, Chicago, Detroit, Seattle and California are among the locations people are leaving to come to South Dakota.

“They are just done,” she said.

Flaig added Custer’s rural feel  combined with a strong school system and the recent fiberoptics upgrade by Golden West have  added to the appeal.

Phil Lampert of Lampert Real Estate called it a “crazy time for sellers,” saying the money people are paying for homes is high, and many buyers are coming to town with cash in their pockets to buy homes.

“It’s been an unbelieveable market the last few months,” he said.

Lampert said he’s down to two residential properties in his inventory, and added it’s not just homes that are selling: ranches, land and commerical property are all hot, as well. He said it’s the busiest he has ever been in his 41 years of having a real estate license. He said in many cases a home sells before the ink is even dry on the listing.

Lampert said many of his clients tell him they like the political climate of South Dakota and are eager to leave such states as Minnesota, Colorado and California. COVID-19 and politics play a part in a lot of it, Lampert said.

“They want to get out of metropolitan areas and come to rural America where it’s safer,” he said. “It’s a crazy world out there right now.”

Ron Bradeen, owner of Bradeen Real Estate, gives a large amount of credit to Gov. Kristi Noem and all of the partners in the tourism industry for promoting South Dakota as a wonderful place to live.

“There are a lot of people in these larger cities who want out of that mess, and the Black Hills are a great place to come to,” he said.

Lewis said Noem is “a very big reason why people are coming here.”

“Everyone is in love with Gov. Noem,” she said.

Reindl said some people are buying homes sight unseen, while others tour the home via video. Both are common for the current market, he said but, even so, it’s happening now more than ever before.

Reindl said any kind of home is hot right now, as he has seen inexpensive homes to homes well over $1 million sell quickly to people from all over. The most popular price range, he said, is from $250,000 to $400,000.

Bradeen said his sales people say the “plus or minus” half a million dollar homes are getting to be the norm.

“These upper-end homes are really attractive on the market,” he said.

Lewis said the smaller acreage of land—five to 10 acres—is pretty much gone and she has sold three homes sight unseen recently.

Jim Ashmore, owner of Southern Hills Title, Inc., said, “If realtors are busy, we’re busy,” and said people from everywhere are buying homes in Custer County. He speculated that part of it is people wanting to flee areas or states they have grown weary of, though he added he doesn’t ask clients what prompted them to come to Custer.

Ashmore said he theorized a decade ago the Custer area could become the next Jackson Hole, Wyo., in a sense — though not identical to Jackson — in that it is a beautiful location surrounded by Forest Service land, and a finite amount of land means it is coveted.

Janet Boyer relayed a story of a couple from Iowa who stopped through Custer on their way to a cabin they owned in Colorado. When they arrived in Colorado, they discovered the neighborhood had changed so much they decided to sell their place in Colorado, which sold in about a week. When they went to Colorado for the closing, they decided to come back through Custer to look at property.

Contractors are enjoying the benefits of the market, as well.

Craig Hindle, owner of Hindle Construction, said he already had business stretched out to the forseeable future, but starting this fall into next year, there are a lot of people who plan to move to the Hills because they don’t like where they are.

“I’m not worried about anything to do,” he said with a laugh.

Hindle said plumbers, concrete workers, etc., have said they have been busy all over the Hills, and Hindle has had people ask him to build homes in Spearfish, Summerset, the Pactola area, etc. He is so busy in the Custer area he hasn’t had to leave, however. He said there isn’t enough workforce for him or the subcontractors.

One thing homebuilders are dealing with is a sharp rise in the cost of construction materials. Hindle said oriented strand board, for example, has gone from $12 a sheet in July to $30 a sheet. The housing boom has driven up the cost of materials, he noted.

Chris Lowe, owner of KRS Construction in Hermosa, said he has never had so many calls for new construction, and that he has commitments for homes to be built for two years out. Some of the homes are local people, while others are from Minnesota, Iowa and Texas. One local person tested their home on the market, he said, and it ended up selling for more than it was appraised at.

Lowe, like Hindle, said construction material costs are high and there are certain items he just can’t get. He isn’t sure of the reason, but lumber prices in particular, whether it’s due to COVID-19-related industry shutdowns, natural disasters or whatever, are soaring.

“I have never seen it anywhere close to this as far as prices,” he said. “Prices are just going through the roof.”

How long will the boom last? It’s anybody’s guess, but Reindl is cautiously optimistic it will continue, while Flaig said she expects it to continue for another year or two, at least.

Bradeen also expects it to continue, saying he believes the boom will be a shot in the arm and raise awareness of the Black Hills even further.

“It’s something that will stick with us for quite some time,” he said.

“I definitely see it continuing,” Lewis said.

The secret is out, Reindl said; the Black Hills are a great, rural place to live, far away from the hustle, bustle and problems of the large cities.

“It’s something us South Dakotans figured out hundreds of years ago,” he said.

“I did that years ago,” Hindle said of leaving city life. “What’s taking these guys so long?”