While the U.S. housing market is in the shambles in most of the country, South Dakota provides a rare place in Americana. Home values in all of the state are rising and good old conservative lending practices are driving the increase with mortgage interest rates that are the lowest in decades.
In Rapid City homes are increasing in value for the second straight year, and the number of homes that are selling is rising for nearly the third year in a row. Low unemployment, hovering around 4%, and record low mortgage rates are driving the increase in home sales and prices.
South Dakota has never had a real estate market that has been boom-to-bust, but a housing market that has been insulated from wild gyrations elsewhere in the U.S. A little appreciation might be worth a lot to homeowners in South Dakota because in most areas of the state home prices haven’t gone down in more than 40 years.
Home sales are projected to rise in Rapid City even though sales have maintained their healthy standard for more than three years, as the majority of the nation suffers with declining home values. Home prices in Rapid City should pick up a bit in 2012, forecast to inflate an average of 3.2% by years end.
In the Black Hills, where home sales seems like they would never end to some locals during what was a regional mini-boom sales are returning to healthy levels after slowing for a while. Home prices are projected to trigger another recovery of sorts with housing inflation forecast at 2.6% for 2012.
The volume of sales in Sioux Falls has slowed from previous years, despite record low mortgage rates that have gotten some purchasers off the fence to make home purchases. Fewer local residents had any reason to move after years of devastating floods along the Red River forced some homeowners to evacuate their residences and purchase new homes.
Sioux Falls can be a dusty place during the hot days of summer and frigidly cold in the winter, but locals who live in the region have a sort of small town sort of hospitality that attracts newcomers to the place, despite some of the coldest winter temperatures in the nation. Home prices are still forecast to rise in Sioux Falls an average of 2.4% by years end.