Coronavirus in Sioux Falls: Construction slows, but not for home builders

A strong start to the year hasn’t been enough to protect Sioux Falls contractors from setbacks as the local economy suffers through the ongoing coronavirus pandemic.

Just two months after reporting the strongest January in years in terms of combined building permit value, City Hall logged one of its weakest first-quarters in recent history for new construction projects.

With one big exception.

Home builders in South Dakota’s biggest city are busier than ever, said Brad Mair, superintendent for A-Plus Construction.

“We have a lot of pre-sold homes, we have a lot of specs,” Mair said.

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As a whole, the construction industry experienced a significant drop-off in construction value compared to the first three months of 2019, with the value of filed building permits decreasing from $133.5 million to $106.4 million.

Slowing commercial construction helped drag down first-quarter numbers, stagnating from a $99.9 million first-quarter 2019 to a six-year low of $54.1 million in 2020.

For perspective, the boom years of 2015 and 2016 rocketed out of the gate with $110 million and $145.6 million first quarters for commercial building permits alone.

The slowdown is nothing like what Mair and other local homebuilders are seeing. Mair is the 2020 board president of the Home Builders Association of the Sioux Empire. While their counterparts experienced a slowdown, residential contractors were issued paperwork for $28.7 million in construction during the month of March alone -- nearly double the value of March 2019 totals and the industry's strongest March since 2017.

As COVID-19 and the resulting state of emergency disrupts so many industries in Sioux Falls and across the globe, Sioux Falls’ housing market is not slowing down.

Demand is still there and the trend has been noticed both by agents and contractors.

“There’s a number of different factors. Number one, interest rates remain incredibly low, so moving is not as difficult a thing to undertake financially,” Mair said. “And I guess there’s just constantly people moving to Sioux Falls, too.”