Part 2: Local housing market remains strong
By Marcus Heerdt
HOT SPRINGS --- The housing market in Fall River County has been strong in the last couple of years, with Hot Springs and the area surrounding it being the most active.
“I have been doing this for 16 years and have never seen anything like it,” said Cathy Sotherland, owner and broker of the Real Estate Group. “The housing market has not slowed down…not even over the winter. And now into late summer we are busier than ever. In some instances, I have seen homeowners receive competing offers within 24 hours of their home being placed on the market.”
“It is not uncommon for a nice home in a very desirable location to go under contract within two weeks of being placed on the market,” said Toni Devereux, owner and broker of Mt. Rushmore Properties.
“In January, February, and March, land was hot because people were looking for space and some type of remoteness,” said Darla Stevens, broker and owner at Century 21 Stevens and Associates, Inc. “But I think we are cooling off a bit. Right now, I have more inventory than in the past six months. Yet exceptional properties are still going under contract within 30 days of being placed on the market.”
“The market has remained strong so far in 2021,” said Jim Bultsma, owner and broker of Heartland Real Estate. “Demand is still consistent for single family homes and lots.”
As for commercial real estate, some realtors believe that the major road construction project planned through Hot Springs is affecting that market.
“Commercial is still fairly slow and likely being partially impacted by the planned roadway rebuild of Highway 385/18,” said Bultsma.
“I think the commercial real estate market will take off after the highway is completed. It will be hard to live through but it will have a better outcome for everyone afterwards,” Stevens said.
Along with a high demand for housing, realtors are seeing home prices increase dramatically due to a number of different reasons.
“Prices are escalating. In Hot Springs, we have very few properties to sell and lots of buyers,” Devereux said.
“We are currently in a seller’s market with a huge lack of inventory,” Sotherland explained.
“There is a lack of properties to sell because all of the inventory has been absorbed and there is nothing to draw buyers in,” Stevens said. “Once the inventory goes up again, that will activate buyers again.”
Bultsma has been keeping records of the Hot Springs area housing market and his data since 2019 is as follows:
• 2019: 120 units with the average price of sold listing at $186,444.
• 2020: 119 units with the average price of sold listing at $212,229 (increase of 12%).
• 2021 to date: 77 units with the average price of sold listing at $228,745 (increase of 7%).
People are also moving to the smaller towns in the county as well as its rural areas; however, due to a lack of inventory and the large amount of public land in Fall River, these areas may not be experiencing the same type of growth as Hot Springs.
“Hot Springs is the most active in Fall River County but only because it has the most listings, but the entire county is very active,” Sotherland explained.
“Edgemont prices are reflecting the same gain as Hot Springs. There have been no home sales in Oelrichs that I am aware of to test the market but Smithwick has one development and has seen more activity than usual,” Bultsma said.
It appears that in recent months, potential home buyers are having a difficult time finding exactly what they are looking for.
“Most people appear to be looking for existing homes. There is a lesser number of people looking for bare land. A major impact on the existing housing market is the lack of any new building or workforce housing. This will continue to be an issue for Hot Springs in the future,” said Bultsma.
“Many buyers are hard-pressed to find what they are looking for as there is not much land to choose from. People are looking for acreages that already include a home but many of these properties do not fall into their price range,” said Stevens.
According to Sotherland, people “are still looking for all types of properties and are grabbing whatever they can get.”
“It depends on what people are looking for,” said Devereux. “There is a shortage of new build homes not only in Hot Spring but nationwide. The increased cost of materials and labor is contributing to this shortage.”
Another factor contributing to increasing home prices is the willingness of buyers to pay cash for homes.
“A lot of buyers are willing to pay for a home well over the asking price in cash, which is a main factor in why home prices are skyrocketing,” said Sotherland.
“I have never seen these high-dollar cash transactions before in the Black Hills,” said Stevens.
When asked where most home buyers are relocating from, realtors mention the same three “main” states: California, Colorado, and Minnesota.
“Where people are moving from has not changed much. I have always seen people from these three states moving here for a long time now,” said Devereux.
“People are moving here from a variety of locations and most have some sort of tie to this area or the state of South Dakota,” Bultsma added.
“In addition to Colorado, California, and Minnesota, I have sold properties to people from places like Oregon, Arizona, and Georgia. The first three states are nothing new, though. People have always been moving to the area from those states. I think a lot of people from California are getting burned out [from wildfires] and cannot afford to rebuild. In Hot Springs we usually have about the same number of people coming in as we do going. But now we have more people coming than going,” Stevens said.
Part 3 of this series will examine the recently released 2020 Census data and how it is possible that all the newcomers to Hot Springs may have been missed in the Census Bureau’s decennial count.