MITCHELL, S.D. (KELO) — Ralph Kiner has worked in the real estate industry for at least 25 years.
He’s seen various cycles in the market but nothing exactly like the market from 2020 into 2021. Mitchell and the surrounding towns in which he does business have housing markets much like the Sioux Falls area and the nation. Houses are selling quickly and the sales are driven in large part by low interest rates.
“You just have to adjust to the markets but it is more difficult when it’s this fast,” Kiner said. “Because you can have clientele that’s looking for specific things. And by the time you can contact them and they look at the property, somebody else has already made an offer and had it accepted.”
Kiner is the owner and primary broker for Mitchell Realty LLC.
“People think there is either a buyer’s market or a seller’s market,” said Cody Burggraff, the owner and broker with Dell Rapids Realty LLC in Dell Rapids. “The truth is there are different buyer’s markets and different seller’s markets.”
What makes this seller’s market slightly different than others is interested sellers aren’t able to sell because there few options for them to move into, Burggraff said.
Kiner said the same thing is happening in Mitchell and area towns.
Over in Lennox, south of Sioux Falls, city administrator Nate VanderPlaats said the city with the help of Lincoln County established a Tax Increment Finance District for housing development. A TIF means new tax money is deferred to allow for infrastructure development such as streets so that property is available for construction.
VanderPlaats said 80 acres in the city of Lennox will be used for new housing. The housing is expected to be a mix of single family homes and townhomes with most in what’s considered an affordable price range.
The affordable price range can differ depending on the city. In a Feb. 24 KELOLAND.COM Original story, several Sioux Falls realtors described affordable housing as in the lower -to- mid-200,000 range, for sure under $300,000.
The highest housing real estate demand in Mitchell is under $200,0000, Kiner said. What he called the affordable range. “…it’s the most aggressive because it’s what most people can afford,” he said.
The housing project in Lennox stems from a recent housing study.
“We did a housing study about two years ago which confirmed what we already knew. We have a tight housing market…,” VanderPlaats said.
He experienced that market firsthand when he and his family moved from Sioux Center, Iowa, about two years ago.
The city has grown by about 500 people since the 2010 Census from a population of 2,100 to about 2,500, VanderPlaats said. Growth has helped to strain the housing supply.
Proximity to larger cities such as Sioux Falls or Brookings make cities such as Dell Rapids and Lennox attractive to potential home buyers, Burggraff and VanderPlaats said.
But like Mitchell, they also have features beyond that proximity to larger cities that make them attractive.
The smaller towns offer a quieter and differently paced lifestyle, the three men said.
“There is a quality of living here…,: Kiner said.
The cities smaller than Sioux Falls may also attract those who commute to work elsewhere but like Lennox with its Sioux Steel plant, they also have jobs that keep people or draw their own commuters.
But Kiner said the state as a whole is drawing interest from outside of Sioux Falls.
He’s worked with buyers who are looking to re-locate to South Dakota because of the economy and other reasons, Kiner said.
The coronavirus also contributed to a tighter housing market in Mitchell, Kinder said.
“Initially, I thought we were down some because people weren’t wanting buyers into their house,” Kiner said. Also, some of his agency’s agents weren’t comfortable coming to work because of COVID-19.
Interest rates aren’t expected to increase significantly over at leas the next year. The Federal Reserve indicated earlier this week that it could be a few years before any significant rate increase.
That would likely mean a tight housing market would continue in towns and cities around South Dakota.
VanderPlaats expects Lennox to continue to grow, which would keep pressure on the housing market. “It’s a good problem to have,” he said.
Burggraff and Kiner said cities in their primary coverage area will continue to be attractive to buyers. The key, they said, is to be flexible if this seller’s market continues.