The 40th state is South Dakota which joined the United States in 1889. Known as The Mount Rushmore State, it is the 17th largest state at 77,116 square miles. But, does the South Dakota real estate market mirror the grand size of the state. The population is 814,180 making it 46th in the nation. The population has seen growth of 4 percent in the past five years (since 2011). South Dakota’s geography mostly consists the Great Plains, Badlands, and Black Hills.
The Missouri River passes through the central part of the state from the northern border with North Dakota to the southern border with Nebraska. The Black Hills region is home to both the historic city of Deadwood and Mount Rushmore. The service industry (retail, finance, and healthcare) is the largest employment industry in the state. The largest single employer in the state is Shaw Industries (manufacturing) with approximately 30,000 employees. The next four of the top five employers have between 4000 and 4800 employees (a livestock buyer, Ellsworth Air Force Base, and two medical facilities). The present unemployment rate is 2.8 percent, much lower than the national rate of 4.9 percent. Not only is the unemployment rate low but the job market has seen a 1.7 percent increase since June 2015.
The South Dakota real estate market appreciation rate is currently 4 percent. The average home sale price as part of the 2016 Housing Market is $164,903, and the median list price is $135,000. The housing market predictions expect to see a continually growing market following a 4.20 percent growth over the past year. The fastest growing region in the state is Lincoln County which includes Sioux Falls. One real estate market website listed 356 rental properties available. A single room or studio apartment in Rapid City may rent for as low as $100 per month while a five bedroom house in Sioux Falls might rent for $2700 per month.
Influencing Factors for the 2016 South Dakota Real Estate Market
- According to Zillow, the South Dakota real estate market’s median home value is $172,800. This is a 7.5 percent increase over last year’s (2015) median home value.
- The current foreclosure rate is 0.53 percent, just under half of the national rate of 1.10 percent. This represents a decrease of 14.95 percent from last year (2015).
- The rent index, per Zillow, is $1201 which is a relatively minor increase over the same time during the previous year.
- The average APR is 3.35 percent but typically varies between 3.16 and 3.62 percent. The current APR is 3.18 percent, below the current national average of 3.29 percent.
Best Places to Live in South Dakota
The largest city in South Dakota is Sioux Falls. The population is estimated to be 153,888. According to Trulia Sioux Falls, 68 percent of residents own their homes, 36 percent are single, and the median age is 36 years. Sioux Falls is the 47th fastest growing city in the United States. It hosts four major hospitals and a long list of financial companies, just some of which are Wells Fargo, Citigroup, and Capital One. The appeal for companies to operate out of Sioux Falls is the lack of corporate state income tax. The Sioux Falls real estate market is a median sale price of $123,150 and a median list price of $185,000. The average sale price is $176,212 which reflects an increase of 5.60 percent over the past twelve months. The foreclosure rate is 0.49 percent, lower than the state average of 0.53 percent. One real estate website listed 394 properties in some stage of foreclosure. The rate as of July 2016 is 21 percent lower than June 2016, and 81 percent lower than July of 2015.
Vacant lots are available for prices starting at less than $25,000 and two or three bedroom homes are listed beginning just short of $50,000. The listings can go as high as 1 to 1.5 million dollars for a larger three to six bedroom home. Listings on Craigslist Sioux Falls start as low as $75,000 or less for a two bedroom house and go up to almost 1 million dollars for four to six bedroom homes. The Zillow Sioux Falls rent index is $1150, and the median rent is $1085. A one bedroom apartment starts renting for around $500 per month while a four to six bedroom house can rent in the range of $2500 to $3500 per month.
Rapid City, at the foot of the Black Hills mountain range, is the second largest city in South Dakota. The population is 67,956 people. Sixty-four percent of residents own their homes, 37 percent are single, and the median age is 37 years. The city is known primarily as a tourism and recreation destination. Deadwood, an “Old West” town, is near Rapid City as well as the Crazy Horse Memorial and Mount Rushmore. Rapid City real estate has a median list price of $195,000 and an average sale price of $163,510. The current home value, as per Zillow, is $222,000, that represents an increase of 2.10 percent. Four properties were listed in some stage of foreclosure. The foreclosure rate is 0.65 percent as of July 2016, which is higher than the state average. This percentage is 100 percent higher than it was in June 2016 and 67 percent lower than it was in July 2015.
Vacant lots are available in large quantities, most priced around $45,000 higher or lower dependent on location. A two or three bedroom home is listed in the area of $70,000 and larger homes with three to seven bedrooms can exceed one million dollars. The median rent is $1295; Zillow’s rent index is $1303. A one or two bedroom apartment may rent for about $500 per month and a three to five bedroom rental house could cost more than $2000 per month.
Pierre is the capital of South Dakota. It is the second smallest state capital in the United States (the smallest state capital is Montpelier, Vermont). It is located in the center of the state, along the eastern bank of the Missouri River. The population is 13,646 people. A majority, 75 percent, of residents own their homes. Thirty-six percent of residents are single, and the median age is 43 years. The Pierre SD real estate market’s median list price is $139,000. A two to four bedroom home starts at just over $125,000 and a five or six bedroom home sells for just under $500,000. One property was listed in foreclosure and HUD Homes has four listings of foreclosed homes for sale. The median rental rate is $1300 per month, and Zillow’s rent index is $1256 per month.
Aberdeen is located 125 miles to the northeast of Pierre. It is considered a college town as it is home to both Northern State University as well as Presentation College. The top two employers are both in the healthcare industry: Sanford Health is first with an estimated 1800 employees and Avera Saint Luke’s Hospital follows fairly closely with about 1500 employees. The population consists of approximately 26,091 people. The Aberdeen real estate market is a small market by volume and costs. The current home value is $179,400 and the median list price is $97,000. This is another city with an abundance of vacant lots which usually start as low as $25,000. A one to four bedroom house may sell for less than $60,000 while a three to five bedroom house may be priced in excess of $400,000. Only one property was listed in foreclosure in the month of July 2016. However, HUD Homes had 263 foreclosed homes for sale.
Spearfish is another small town, but it is home to Black Hills State University. The population is also small with only 10,494 residents. Sixty-one percent of residents own their homes, 40 percent are single, and the median age is 41 years. The value of a home in the current Spearfish real estate market is $289,450, but the median list price is only $130,000. A two to three bedroom home can be purchased for about $40,000 while a three to five bedroom home sells from $750,000 up to one million dollars. The rent index is $1380 and the median rent per month is $1037. Two bedroom rental units begin anywhere from $300 to $500 per month. Rent for a three or four bedroom house seems to begin around $1200 but not exceed $1400 per month.