South Dakota housing market bucks the trend
Jeff VanderWoude just put his Sioux Falls home on the market.
"It's a split foyer, three bedrooms with two upstairs, one downstairs, bath and a half," he says, sounding almost like a realtor. "Very big back yard."
VanderWoude and his wife Jackie have spent the last several months getting their home ready to sell. They did everything their realtor suggested -- they repainted and made the house look less cluttered.
They hope it doesn't take long to sell, because they already found a bigger home and bought it.
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"The idea of having two mortgages, kind of gives you hives but we think it'll be all right," Vanderwoude says.
In Sioux Falls, the average time on the market before a sale is a hundred days. Nationally, houses sit for about seven months.
South Dakota saw an 8 percent growth in home sales in the fourth quarter of 2007 compared to the same period the year before. According to Barton Hacker, head of the local Realtor association, South Dakota was the only state to see growth in home sales that quarter.
Hacker says the growth was statewide. There are new homes going up around Sioux Falls and vacation homes in the western part of the state in the Black Hills.
"When you have a community like Sioux Falls that's growing at a population rate of 3 percent and unemployment is under 2 percent," Hacker says, "and the home values are growing at 3 percent, that's a perfect storm if you will, to essentially buck the trend that's occurring nation wide."
Hacker says housing sale projections for this year remain strong. A recent industry report shows Sioux Falls and Fargo, North Dakota, among the top five strongest markets for home sales in 2008.
Economists with the Federal Reserve Bank in Minneapolis say Sioux Falls and Fargo won't experience a sluggish economy like other parts of the Midwest.
Tobias Madden says both communities have slow and steady growth with more diversified economies. There's been growth in natural resources like agriculture and energy products like ethanol.
Madden says the areas in the national economy that are experiencing a slow down aren't hitting the Dakotas. But he says Minnesota will be hit harder by the downturn because it's more invested in the housing industry.
"There's a lot of wood producers, paint producers, window makers, furniture makers, financial services firms that support the housing industry," Madden says. "With that down turn, (those) might hit Minnesota a little harder than the nation."
Madden says he expects Minnesota to continue to see a drop in the housing market in 2008 while South Dakota continues to grow.
