The corona effect on local real estate

Three out-of-state families made trips to the Black Hills this past weekend, but not simply for a fun getaway. Those folks from Minnesota, Wisconsin and Iowa were in town to look at real estate properties in the area and, according to local realtors and builders, they may be part of a growing trend spurred by the recent coronavirus lockdowns. 

Custer realtor Faith Lewis was the agent showing the properties to the families from states to the east. She believes the inquiries are the beginning of a possible migration to more rural areas like ours. 

While saying things slowed down to an extent during the height of the coronavirus pandemic in March and April, Lewis said her real estate business didn’t grind to a halt, but merely kept people from coming here from out of state to look at properties. However, she said through the use of online video home tours she sold two houses sight unseen. 

“That’s not something we normally do,” said Lewis, “at least not on a home.” 

She said occasionally undeveloped land will sell without buyers actually seeing the property. 

Ron Bradeen of Bradeen Real Estate and Auctions also recently sold a Custer home via an online auction to a buyer who had not seen the house. 

In addition, his online auctions have been “off the charts” in recent days. Bradeen speculates that some of the increased interest in those auctions may be driven by the fact that buyers were quarantined at home during the coronavirus crisis. 

Bradeen said, while he did not see a severe slowdown in business during the height of the crisis in March and April (which are usually slower months anyway), things are really picking up now. 

“We had a great April,” said Lori Svoboda at Western Skies Real Estate. She also said inquiries about local properties are continuing at a brisk pace, due perhaps as much to the quarantines as to any desire to escape from big cities. 

“I think people are bored from being quarantined,” said Svoboda. “We’ve had a lot of online inquiries.” 

In addition, she said showings are scheduled for potential buyers from places like Colorado and Minneapolis.

“They’re coming from all over to look,” she said. 

Meanwhile, Jared Carson at Green Real Estate and Investments said, while it’s not overwhelming, he is seeing more interest in Black Hills properties from states where governors are continuing to extend lockdowns. 

“The diversity of out-of-state buyers has widened,” said Carson, noting that the usual inquiries from neighboring states like Minnesota, Iowa and Nebraska are being joined by a second tier of potential buyers from Colorado, California, Texas and Washington.  

“We’re starting to see some folks out of the Eastern states that we don’t often see,” he said, “states like New York.” 

Carson agrees that as more states open up there may be even more covid-driven interest in properties here. 

Carson also speculates that with campgrounds filling up over the last several weeks there may be an increased demand for properties that allow owners to park an RV with electrical, sewer and water hookups and put off building a home until later. 

Custer homebuilder Craig Hindle also believes the coronavirus crisis may lead to an exodus from urban areas to more rural settings like ours. 

Hindle said the crisis taught many people it was possible to work from home and he wonders if that might mean people will migrate.

“I expect within the next year or two an influx of people moving to the rural areas,” said Hindle, “getting out of the big cities and working from home. I think that’s our new norm.”

Bradeen is not as quick to credit the coronavirus situation for the interest in moving to the region from more populated areas.

“We’ve always had people wanting to get out of the fast lane and into the slow lane,” he said. 

He said the upcoming auction of a Wyoming cattle ranch is getting keen interest, but notes that is usually the case with that type of property. 

Hindle said, while Custer remains a seller’s market for moderately-priced homes, he doesn’t expect a big real estate boom because of the shortage of buildable land for sale. 

However, he said there may be a small increase in the next year or two, noting “interest rates have a lot to do with that.”

Hindle said he stayed busy during the peak of the quarantines when the stock market was crashing, but said some future projects were put on hold. 

He said it was “mostly retirement stuff because people were worried about their portfolios.”

However, Hindle said things began to turn around the first of May and the phone started ringing again and hasn’t stopped. 

One change for the real estate industry noted by Lewis has been a greater attention to issues of safety and sanitation. 

“I think the COVID has made us more aware of our actions,” said Lewis. “It has forced us to figure out how to safely show homes and interact with clients and it has for sure made us aware of germs and the need for cleanliness. It has also taught us just what we can do from home or office and those things that must be done in person.”

Lewis said another policy change that has decreased the need for in-person home showings is that she will show houses only to people prequalified for a home loan. 

Sue Studt, the administrative partner of Studt Construction, said the virus also impacted the way their operation functioned. 

Since her immune system is somewhat compromised, Studt said her husband, Clay, was concerned about  bringing the virus home from the job site. 

The solution to that was limiting subcontractors working on a project to only one crew at a time and making sure the workers maintain social distancing while not on the job. 

In between work crews, someone would sanitize door handles, stair rails and other items commonly touched. 

Studt said everyone was good to work with in the situation including some homeowners in Sioux Falls who volunteered to stay home after the Smithfield outbreak rather than come to Custer to supervise final construction of their home. 

While no one has a crystal ball to predict the future of the local real estate market, everyone agreed there are some hopeful signs right now. 

“The online activity right now is through the roof,” said Lewis. “The numbers of inquiries into Black Hills properties is higher than I’ve ever seen. So if they make it here — which I think most of them intend to — it’s going to be crazy for a while.” ­