This week in 1973, Tony Orlando’s “Tie a Yellow Ribbon Round the Old Oak Tree” started a run of four weeks at #1 on the US singles chart. The song would eventually be ranked by Billboard as the 37th greatest song of all time. Man, that Tony Orlando could wail.
And not bad for a song based on a true story about a guy who gets out of prison and rides the bus home hoping his former lover has tied the yellow ribbon around an oak tree as a sign she wanted him to still be in her life post-lock up (hint: she does, and the whole bus cheers).
This month’s economic indicators are a little like that—and by that, we mean housing. We cheer the continued growth and prosperity of the region (low unemployment, increasing wages, high consumer spending, increased boardings), but realize this prosperity will continue to be held prisoner by a lack of available and affordable options.
Just look at the numbers. One year ago, there were well over two hundred houses listed in the Rapid City market with a median list price of $227,071. Our current indicators show 118 with a median list price of $302,000. If we add in the anecdotal evidence, the problem only magnifies. And you know the stories we’re talking about—your neighbor got a hundred offers on his/her house at over $50,000 the asking price.
What’s our yellow ribbon? What’s our oak tree? There are no easy answers. Regarding affordability, which seems to be the biggest problem, there are only four basic solutions:
- Subsidize the cost of acquisition/construction (code for subsidizing the developer);
- Subsidize the purchase (FHA loans are a good example and code for subsidizing the borrower);
- Get into the business of developing affordable housing (not an ideal role for government in a real-time market where prices change constantly);
- Work with the non-profit sector to address specific situations or problem clusters.
Whatever the solution, we’ve got to hope that the market responds as quickly as possible. The B-21 isn’t waiting around and will be here before we step off the bus.
President & CEO
Updated: April 23, 2021