Hi, Manda25.
I am a full time realtor for the Black Hills, out of Rapid City. I am also a mathematician and engineer by background, so I beat on the market data pretty vigorously, in order to provide a market trends newsletter to my clients. I hope that makes me qualified to answer your question.

Interesting, that I generally agree with Diane's prior answer, and would not have tagged on behind her, except that, while I generally agree with her conclusions, I believe it may be even more helpful to offer some data analyses that explain why the market is what it is.

The short answer to your two questions are: The Black Hills residential market is down very little. The homes around midian price and below are certainly not selling $20,000 below list. That's from hard data I collect each week. But the larger question is, "Why?" I have already posted some of this on my blog, as well as additional market analyses, at http://www.BlackHillsMarketWatch.com.

The national real estate bubble burst in first half of 2007. So I base my analyses of the Black Hills market in comparison where we were on that date.

First, sales prices for our area continued to rise for about a year, in to 2008, but now prices are now nearly exactly where we were in mid-2007. Diane is right, though, that higher end homes (significantly above the median price) are selling with motivational discounting, whereas homes at and below the median price are selling rather well without serious discounting. The Facts: Average sold price in 2007 was about $169k, then up to $177k in 2008 then back to $169k in 2009.

But the really big news, the story behind the story, is in the volume of sales, and the number of unsold homes available. We have about as many homes for sale now as in 2007 and 2008. And the Days-on-Market is a bit longer but not dramatically. So it's not as if prices are unrealistically high as Diane describes, and thus preventing turnover. The homes that are on the market, -are- selling. The Big News is in the number of homes sold. Sales volume is down about 43% since the bubble bursting point. That is a huge drop! In 2007 we sold 881 homes by this time year to date, then only 744 in 2008, and this year on July 1 only 503.

So, if we are selling only 57% as many homes now. But they are selling for about the same price, in the same amount of time. The inventory of unsold homes is even slightly fewer now than the high point two years ago.

What's up?! The market we -do have- is very solid. As described in my market analysis blog, the rest of the nation looks at us simplistically, the data above, and conclude we are in a real estate "La-La Market." But what they don't realize is that nearly half of our market is sitting on the sidelines, waiting. Sellers are waiting (otherwise we'd have a huge growth in unsold backlog). Buyers are waiting, otherwise we'd see prices for creeping up or DOM's going down.

The only way I can explain all this is to say that a hoard of buyers and a hoard of sellers are "sideliners." Will Diane prove prescient about a looming market correction? Maybe. If the Sideline Sellers decide to put their homes on sale, and the Sideline Buyers stay away, then yes, prices surely will decline.

But maybe not. If the Sideline Buyers decide to show up one week and start buying, while the Sideline Sellers stay away, then we should see prices go up, too.

So now, to answer Manda25's original questions again, but in regard to the future, we can be sure we won't know til we find who shows up first, the wallflower sellers, or the buyers? If they both show up together, we'll tend to see prices remain stable, but just more of them.

That's my opinion, any way.

If you would be interested in ongoing analyses like this, check now and then with http://www.BlackHillsMarketWatch.com.

-Lee Alley
Prudential Real Estate
Rapid City, SD

Manda25 - Been wondering the same thing here on the western part of the state. Have seen many homes that in doing comps, are $20,000 all the way up to 50,000 more than what they are really worth. Adding to that issue, is that many of these homes have been on the market for a year or longer in some cases, but no movement in price. I know the big "fall" in the market hasn't hit South Dakota yet, but it sounds like we are 6-9 months behind the rest of the country in that realm. I do hope that sellers and their realtors become more realistic soon because I do believe there are buyers out there - but buyers that aren't willing to pay too much for a home. The only homes I'm seeing in these parts that are selling are below $125,000 and the selling price is pretty close to asking. Sorry about the long answer. I'm not a realtor that has the concrete facts, but I have been dealing with a realtor in my house search, and what he has found for me pretty much underscores that people just aren't willing to lower their prices...... I hope there is a change fairly soon.