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ASSOCIATION NEWSLETTER

The official printed monthly publication. Stay informed on recent news and happenings of the association. Learn about involvement opportunities for members, read up on the latest building permit stats and keep informed of the latest news which may impact your business. Issues are mailed to Primary and Affiliate members around the 1st of the month.

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HOME IDEAS MAGAZINE

This free magazine is the official industry and event publication for the association. The publication promotes the association's major events and members. Pick up your free issue at our office.

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Recent Blog Posts

Today's Real Estate Market, Opportunities and Challenges

June, 2022

Written by: Tony Bachman

 

We live in a community and state that has seen many opportunities with economic development and population growth in the last few years. This presents challenges like housing inventory and affordable housing. There is a unique relationship between Home Builders Association of the Sioux Empire (HBASE) and the Realtors Association of Sioux Empire (RASE), where builders and realtors are helping our clients make educated decisions on one of the most significant investments in their lives. There is a high level of communication and collaboration between our two associations. We work well together, which is excellent for our clients, community, and associations.

We have all seen more demand from our clients for new construction homes, due to low inventory and high demand for homes with HOA’s (Homeowners Association), so buyers have more freedom not to be concerned with lawn care & snow removal. We’ve also had many people relocating from other states who like what our community and South Dakota have to offer families with standard of living, employment and business opportunities. We know that
the community leaders, developers and home builders have been doing their best to help ease our market's current record low inventory conditions with new developments, new construction homes and apartment buildings.

We’ve all experienced challenges over the last couple of years with shutdowns, low or no inventory and concerns over affordable homes. Fortunately, our clients benefit from the unique relationship we share between HBASE and RASE. With builders and agents who are working together to help our clients achieve the dream of homeownership and make educated decisions about one of the most significant purchases in their lives.

In the conversations we have with clients and builders and on the “It’s Your Business” radio show with Bill Zortman, we discuss opportunities and challenges in market statistics by reviewing past trends. In our conversations about opportunities and challenges related to low inventory and rising interest rates, have people asking questions about the state of our current market.

 

Here are a few talking points for buyers and sellers asking questions about our current market.:
-Is this a good time to buy, or should we wait?

-Will home prices drop? Based on our current inventory level of less than two months, the prices will not drop due to demand being higher than supply. When prices dropped back in 2008, we had over nine months of inventory. Until we see over six months of home inventory, we are still in a seller's market.

-Appreciation of home values in South Dakota from Jan 2018 to Dec 2021, there has been an average of 52% appreciation. In 2022 home appreciation is expected to increase by about 9%, which is double traditional average appreciation of 4%. With rising interest rates, buyers shouldn’t wait for prices to fall anytime soon.

-Appreciation for a home sold in Jan 2022 for $360,000 is expected to be worth $455,000 by Jan. 2027

-When addressing concerns about rising prices and inflation, homeownership is one of the best investments anyone can make to hedge against inflation.

The low inventory and high demand have created an imbalance between supply and demand. It has been challenging for people searching for homes; it looks like this imbalance will continue through 2022 and into 2023.

We are blessed to live in the Sioux Falls area with our outstanding standard of living, which is vibrant with excellent access to medical facilities, a solid & diverse economy and all the significant cultural aspects our community has to offer. We will see continued growth and interest from people looking to relocate moving forward.

In conclusion, it is a privilege to have the HBASE and RASE work closely together to help solve homeownership challenges! June is National Homeownership Month which celebrates the value that homeownership brings to families, communities, and neighborhoods. We all take pride and joy in helping people achieve the American Dream.

Planning for the City of Sioux Falls

May, 2022

Written by: Jeff Eckhoff (Director of Planning & Development Services at City of Sioux Falls)

 

It is no secret that we are riding an unprecedented wave of residential and commercial growth in the City of Sioux Falls. Last year saw us surpass the $1 billion mark in total permit value and while commercial building saw big gains, single and multi-family construction led the way with over 3,000 housing units permitted for a total valuation of almost $600 million! This included 850 single family homes and over 1,800 apartment units. Combined with 2020, over 5,800 new housing units, almost 1,600 of which were single family homes, have been permitted in the last two years. So the question on everyone’s mind is will this continue and if so for how long? A review of 2021 tells us the following. Preliminary plans are an early indicator of land development and in 2021, 1,307 acres were submitted for preliminary plan approval, twice the annual average.

And while the southeast continues to carry the most robust building the northwest and northeast quadrants showed the greatest increase in newly platted acres which is a reflection of the increased interest caused by the growth of Foundation Park and the opening of Jefferson High School.

And while the platted acres are indicators of future growth the number of platted lots still remain strongest in the southeast.

And finally let’s look at building permit activity over the last five years for the different types of residential construction.

This data and more can be found on the City’s website, https://www.siouxfalls.org/planning-dev/planning click on the 2021 Development Survey link.

As of April 8, less than 1/3 into the year, the City has already permitted over $407 million of projects which includes 202 single family homes, 93 town homes, and 934 apartments. And while it is easy to assume that topping last year’s building is a forgone conclusion, it is worth noting that headwinds do exist: cost escalation (March CPI at 8.5%); material and labor availability; interest rate increases; and of course the escalating war in Ukraine and the fallout from economic sanctions on the global economy, all cast uneasy shadows on predicting the national and local economy.

Administratively, we will continue the work of addressing the incredibly complex issue of accessible workforce housing. Through Mayor TenHaken’s Housing Action Plan we have developed a streamlined Tax Increment Financing Program for home ownership that assists with infrastructure in return for homes that meet South Dakota First Time Home Buyers criteria. We have added flexible financing for multi-family projects that reserve a minimum number of units for affordability and provide down payment assistance to Public Service Officers in qualified neighborhoods. We have also expanded our home repair and rental repair programs to serve a broader range of buyers and property owners. And finally we are working with our non-profit partners to recycle homes that were previously scheduled for demolition.

Solving the accessible housing need is a complicated, multi-faceted issue that carries no silver bullet. Key to this effort is our partnership with our Home Builders, lenders, and developers as we work hard to develop programs that retain the integrity of the market and work for the long term benefit of the community. We continue to rely on your candid input as we adopt the latest building codes and write our local amendments so they make sense for our market and for Sioux Falls.

Yes housing is incredibly complicated and it will take all of us to pull through. On behalf on the City I want to personally thank HBASE for your continued partnership and support, we couldn’t do it without you!

Career Housing: South Dakota’s Next Frontier

February 3, 2022

By Governor Kristi Noem

South Dakota has built the strongest economy in the country. That’s great news for our people, our communities, and our businesses.

In 2021, South Dakota gained 22 new residents each day. We saw three years’ worth of revenue growth in a single year. And our unemployment rate is just 2.7%. This is making our state stronger—but it also comes with some growing pains, especially when it comes to housing.

Housing is South Dakota’s biggest need right now. Families are struggling to afford the few houses that are on the market. Businesses that are desperate for workers can’t find anywhere for them to live. That’s why I have made spurring the development of career housing one of my top priorities during this
legislative session.

My budget recommends an investment of $200 million in housing infrastructure. This funding would be routed through the Office of Economic Development’s Local Infrastructure Improvement Program (LIIP). This is a program that is already well-established and familiar to South Dakota communities. We’ll be asking for an equal match from cities and from developers for these dollars, turning it into a $600 million overall investment in housing across South Dakota.

These grants will help cover some of the upfront costs of housing development—water, sewer, curb and gutter—for single-family homes and multi-family complexes alike. This will be especially helpful in attracting developers and builders to our smaller towns and more rural areas.

Our goal is to increase the housing supply in South Dakota. That’s going to look different in every community. And that’s why we’ll be relying on city and community leaders to tell us what they need. We want to see cities and developers thinking creatively, together, and coming to us with those ideas
and plans.

My Office of Economic Development is well-equipped to get these funds out the door quickly and efficiently. They will work in partnership with cities and developers to fund their unique housing needs—and provide significant flexibility with regard to matching funds. Those can be direct matching dollars, it could be a TIF, it could be donated land—whatever makes the most sense for each community. The bottom line is that this will not be a one-size-fits-all approach. With no minimum or maximum funding amount, we allow the cities and developers to come to us with proposals that meet the specific needs of their communities.

With national conditions changing daily – supply chain issues and inflation rising – I am emphasizing to lawmakers the importance of taking care of this now so we don’t get bogged down by future hurdles. This is not just an investment in these communities. This is an investment in the future of South Dakota—and I encourage all of you to let your state legislators know how important this investment is.

Addressing Community’s Housing Needs Through Diversified Approach Focused on Partnerships, Collaboration Together

January 11, 2022

By Mayor Paul TenHaken

Sioux Falls is experiencing record growth, as evident by our recent milestone of filing $1 billion in building permits for 2021 even before the close of the year on Nov. 22. We continue to see new businesses open and existing businesses announce expansion—a key indication that we’re on the right path as a community. Our community continues to be a draw as an exceptional place to live, work, raise a family and start a business.

The flip side to our record growth brings with it tension in both workforce and housing needs. Know that as a City team we are very intentional on being strategic with our growth management planning. We are having ongoing conversations to ensure we are growing in a sustainable manner, which includes conversations around housing concerns. A sufficient housing supply is critical to recruiting and retaining our city’s workforce to sustain our economic growth.

While housing demands have recently become more apparent in Sioux Falls, our attention to housing as a foundational element for economic growth is not new. When I took office in 2018, I developed the One Sioux Falls framework to focus on the city’s most pressing issues, including housing. That decision to create housing as an administration priority has helped to lay a foundation to prioritize housing needs today. We must continue to adapt to our response to the community’s housing needs as Sioux Falls grows, and we’re tackling this complex issue through a diversified approach that is focused on partnerships and collaboration.

That includes partnerships both at the state and local level, including continued collaboration with the Home Builders Association and South Dakota Multi-Housing Association. For example, we rely on industry input when considering changes to building codes that will affect the housing industry, and we appreciate this continued partnership.

Our 2026 Housing Action Plan serves as a multifaceted framework to help solve today’s challenges, with focus areas on land, workforce, public incentives and partnerships, design and building standards, and infrastructure. We’re already seeing success in several areas. Business partnerships such as Millard Acres, a partnership with Habitat for Humanity to construct 26 affordable twin homes, are important areas of opportunity. We have also increased support for Forward Sioux Falls and Southeast Technical College, and with the City Council, developed a Housing Fund to generate creative approaches that address needs across the broad spectrum of the industry.

We recently created the City’s Neighborhood Revitalization Division, which brings our teams that address housing and neighborhoods together and working to keep existing Sioux Falls neighborhoods investable. This division is working with property owners and meeting with neighborhood associations on keeping property up and crime down in Sioux Falls. Within the Planning team, we recently added a new plans examiner to help address our growing workload and review plans in a timeframe that affords our contractors the ability to reasonably meet their project timelines.

Moving forward as we advance our 2026 Housing Action Plan, we continue to focus on strategies that will move the needle on housing within the identified core areas. That includes continuing to leverage available federal funds and public incentives to reinvest in our city’s core neighborhoods. Among many efforts, we are also working with partners to proactively assemble land for redevelopment and for moving existing homes. Additionally, in 2022, we will be sharing recommendations from the Accessible Housing Advisory Board (AHAB) for the Housing Fund. These recommendations will address single-family, multi-family and neighborhood revitalization, all critical components to housing in Sioux Falls.

Addressing our community’s housing needs will require a continued focus on collaboration and a strategic approach to position Sioux Falls for the future. Thank you for your continued partnership in this important work.

Home Builders Association Announces New President

January 10, 2022

Leadership ensures continued success for local home builders and community engagement.

The Home Builders Association of the Sioux Empire announces Jon Beatch, Beatch Construction LLC, as the new 2022 President of the Association. Jon succeeds Tom Jarding of Jarding Construction. His role will focus on ensuring a steady path forward, helping to uncover ways to address industry opportunities including building the local workforce and easing supply chain issues.

“This announcement is especially rewarding,” says Tom Jarding. “Jon is an empathetic, multi-tasker and will serve our Association with a heavy focus on communication, tackling each challenge, head on. His easy-going personality makes him an approachable leader for our membership and community.”

The Home Builders is a diverse non-profit where members strive to meet the housing needs of the Sioux Empire. 200+ builder member companies collaborate as small-volume builders, production builders, single- and multi-family builders, light commercial builders, remodelers and land developers. In addition, over 550 Associates add value as subcontractors, service providers and suppliers (i.e. windows, drywall, electrical, flooring, paint, furniture, landscaping, etc.).

While the Association has grown steadily over the years, Jon’s role will represent a strong network of craftsmen, innovators and problem solvers dedicated to building homes, enriching communities, and changing lives.

The Association has worked through the pandemic, crafting new ideas and busy building schedules. “The transition from Tom will ensure a continued resilient effort,” says Beatch. “As industry professionals, we are eager to see success for the surrounding area in creating affordable housing and we’ll continue to focus on celebrating the ‘small stuff’ every single day.”

The Sioux Empire Home Show, where Beatch serves as a Vice Chair, will kick off the year, February 25 – 27. “This will be the first event where our community can join us in 2022, seeing the latest home design ideas at the Sioux Falls Convention Center,” Beatch shares. “Folks can see everything in one stop: home technology, kitchen/bathrooms, cabinetry, outdoor furniture, hardscapes and more. We’ve got over 200 local vendors sharing the latest trends to explore.”

Jon has more than 15 years in home building and remodeling, delivering successful residential projects across the Sioux Empire. He has participated and led various Association committees including the Builder’s Forum and jump started the Events Committee. He’s also active with the Remodeling Council, the Showcase of Remodeled Homes event (occurs annually in the fall) and the Home Builders Care Foundation, the philanthropic arm of the organization. He attended North Dakota State University for Construction Engineering and is a 2nd generation builder, working with his dad, brother, and wife for their family business founded in 1977.

Jon’s presidential term will go through December 2022.