The number of homes sold in the Rapid City area fell for the fourth straight year in 2010, but the average sale price crept up after two years of decline.
Annual indicators released by the Black Hills Association of Realtors show a mixed picture but one that Realtors in many markets still would envy.
"It was level, and that's actually good news if you contrast it to the national picture," said Linda Rausch, a broker associate at Prudential Kahler Realtors and president of the Black Hills Association of Realtors.
In the Multiple Listing Service area in and around Rapid City, 1,336 residential properties sold in 2010, down 3 percent from last year and down 27 percent from the peak of 1,839 in 2006.
But while the number dropped, prices crept up. The average price a residential property sold for was up 0.7 percent to $176,211. The high was $187,096 in 2007.
"The drop is leveling off," Rausch said. "We still have a nice inventory. People are still buying and selling homes, people are making a living selling real estate. I think that's good news."
Homeowners have largely retained the equity in their properties, which clients are sometimes surprised to hear, Rausch said.
"You're always impacted by the national media, even though our local market is strong and stable," she said. "They look at the national news and they think, ‘I'll be upside down; I'll never be able to sell my house.' Most of our job is convincing them, ‘We can get your house sold. It's not a hopeless situation.'"
The average house sold was on the market 84 days, on par with the last three years and a short time when compared to many other markets nationally.
"The fact that we are less than 180 days means it's still a seller's market, if you can believe that," Rausch said. Sellers who price reasonably and have a clean, "move-in ready" home will have no problem selling in most price ranges, she said.
The biggest volume of sales was homes in the $150,000 to $199,999 range. There were 518 homes sold in that range, and they were on the market an average of 87 days.
It took longer to sell homes in the upper ranges of the market, however. The nine homes in the $600,000 to $999,999 range took an average of 192 days to sell.
"People aren't working for an hourly wage to pay for those houses," Rausch explained. "As investment income has softened, they have less money to be able to buy houses."
One reason for a solid 2010 overall was interest rates at historic lows, which helped qualified buyers get more home for their money and may have pushed up sales prices, Rausch said.
"We don't have fire sales like they might in Las Vegas or Arizona or California," she said. She said there are no statistics kept, but she estimates that fewer than 10 percent of homes on the market were there because of foreclosure or short sale.
An $8,000 tax credit for first-time homebuyers was in effect in the first part of the year, and Rausch said it helped sell homes to people who might not otherwise have made a move. But when it ended, the buying didn't dry up, she said.
Other Realtors agreed.
Before the credit expired, Real Estate Group owner/broker Keith Carlyle said, "There were a lot of Realtors that were stressing out. And it didn't dry up. It just kept going."
Now, more stringent loan requirements are making it harder for new buyers to get into a home. But Rausch said requirements of 5 percent down payments are "not unreasonable" historically.
"All the people in my era, we had to save 20 percent down and closing costs. The bank wouldn't even talk to you if you didn't have 20 percent in your savings account," she said. "Then we went to a time where if you had a job, you can get a house."
The political climate may contribute to a stable 2011, Carlyle said. He said conservatives "shed a sigh of relief" after the Nov. 3 election and are now "more willing to open their pocketbook" for both residential and commercial transactions, thinking that there will be limits on further taxation and business regulations.
"Every winter from Thanksgiving through the first of the year, it's a real slow time of the year," he said. "Let me tell you, (this year) it's been brisk. People are loosening their purse strings."
Carlyle said smaller, local banks are filling a lending void and "the commercial market is coming alive."
Rick Tysdal, broker/owner at Century 21 Spearfish Realty and a board member of the Northern Black Hills Multiple Listing Service, said he has seen similar trends in the Northern Hills.
The average home sale price dropped from around $175,000 to around $164,000, but Tysdal said that's "distorted" because many of the new homes for sale in Spearfish are in that lower price range, which is attractive for younger families coming to the area.
The recreation and investment homes market has been steady, while land prices seem to be dropping especially for acreages sold at auction.
But politics have had an effect there, too.
"Ever since the election, our office has gotten a lot busier," Tysdal said. He said buyers sense stability and control.
"I have a bright outlook for the year," he said.
Contact Barbara Soderlin at 394-8417 or at email@example.com.