Sales of homes priced between $200,000 and $300,000 jumped nearly 40 percent this year in the Sioux Falls area.
One look up and down Lillian Avenue in western Sioux Falls and it tells the story. At least 20 homes priced between $200,000 and $300,000 have just been built or are going up.
"It's mad around here. They're going up pretty quick. They do a good job though. We're ready for it all to be done. It's getting there," new homeowner Brandon Bell said.
Bell just bought a house on this street in May. Because this price range is in such demand, it took a little shopping around to find it.
"We're pretty fortunate to be able to step into something this nice in this price range. But that's kind of what the market is calling for right now," Bell said.
"When I started building, absolutely $200,000 to $300,000 homes, those were the high-end homes we were doing at that time. Right now, this is pretty much the normal. It's what everyone is after: three bedrooms, three-stall garage, main-floor laundry," builder Brad Mair said.
Mair is getting a $270,000, 1,600 square-foot home with an unfinished basement ready for Saturday's Parade.
"On the Parade of Homes, there are always going to be the homes everyone wants to go see that are higher priced, the million dollars homes. But for the most part, people coming through the homes at this price range are really people who are interested in this size home and features in a home like this," Mair said.
There are 16 homes on this fall Parade of Homes that range between $200,000 to $300,000. Four of them are in the $200,000 to $250,000 price range, while the remaining 12 are $250,000 to $300,000.
The average sale price of a home jumped more than eight percent in Sioux Falls in August to just under $200,000. Maier says it's a combination of higher demand and higher costs for materials and lots driving up prices. And he's not afraid to put up a spec home in this price range.
"I don't think it will be on the market for long," Mair said.
A rise in interest rates has also created urgency for some people to buy a home in the "move-up" price range before they go any higher.