In the 1967 film Cool Hand Luke, Paul Newman’s character takes one of the most interesting bets in cinema history: eating 50 hard-boiled eggs in an hour.
Bloated and weary, and clearly in the days before competitive eating, Newman forces egg after egg into his mouth until he can barely chew or stand up. With one second to spare, Newman swallows the final bite of the final egg. And in that moment an icon was born. It didn’t matter that Newman was only nominated for one academy award for the role. The guy was legend.
This month’s economic indicators are a bit like that. The Black Hills may not be as good looking as Paul Newman, but the housing market here is becoming the stuff of legend. Compared to the same time last year, there are 77% less listings. And we feel like that’s probably an underestimate. The data says the median list price is $352,450, but that’s probably also an underestimate. So we’ll clue you in on another stat that drives the point home. In the month proceeding the pandemic (February 2020), the median listing price per square foot was $135. Today that number stands at $162 per square foot. That’s an increase of 20% in just over a year. And unheard of in the region’s history.
How high does the price of housing go before it affects the region’s ability to grow? A lot of that depends on wages, which also continue to rise, up 8% from a year ago.
Eight is less than twenty, so basic math tells us that, at least for those who are new to the region, inflation is beginning to erode wages.
But it’s not just housing. It’s everything else. For example, the price of corn around these parts is up 101% from a year ago. And corn goes into a lot of products. It’s gotten to the point where even Warren Buffet is sending warning signals with the phrase “very substantial inflation.”
Is it enough to keep people from coming here to buy a home or curtail spending? That’s really the question, since the same thing is happening all across the country.
Right now, it doesn’t appear so. Building permits are up 113% from a year ago, and the region is on pace for another record year of building valuations. And notice gross sales from a year ago. $721 million in consumer spending in one month? That’s no joke.
Anyone want to take a bet on a billion-dollar month in June or July? It’s a lot of hard-boiled eggs, to be sure.
President & CEO
Updated: May 21, 2021