South Dakota town has cheapest homes-Affordable Yankton South Dakota’s housing prices worlds away from Palo Alto’s

Yankton, S.D. — Yankton is a lonely speck of Midwestern America, nestled on the banks of the Missouri River in the southeast corner of South Dakota, more than 1,700 road miles from the pampered San Francisco suburb of Palo Alto.

Wyatt Buchanan, Chronicle Staff Writer

But Palo Alto, best known for Stanford University and Hewlett-Packard, and Yankton, best known as the hometown Tom Brokaw left, share distinct places of honor at either end of a national housing survey.

If you want to buy an average four-bedroom home in Palo Alto, population 59, 000, prepare to pay the highest price in the country: $1.26 million, according to the Coldwell Banker real estate company.

To buy the same exact house in Yankton, population 13,500, it will cost $101,000, less than anywhere else in the nation.

Same house. Same 2,200 square feet. Same four bedrooms and two baths. Same two-car garage.

Holly Reyes’ reaction was the same as nearly every other Yankton resident who heard about the disparity in housing prices.

"Oh my gosh!" she said, as it dawned on her that if she lived in Palo Alto, her house would be worth $1.1 million more.

Reyes paused. This is, after all, Yankton, a town where jetliners fly over day and night but never, ever land.

"Well," she concluded sagely, "nobody wants to live in South Dakota."

But think about this:

For the price of that home in Palo Alto, you could buy 12 1/2 such homes in Yankton.

Here’s a fair portrayal of the benign nature of Yankton, published as the top item in the crime report section of the Yankton Daily Press and Dakotan:

"A Yankton woman reported that a string of icicle lights were (sic) pulled down from her porch in the 1000 block of West 12th Street sometime between 6: 30 p.m. and 10 p.m. Tuesday. The lights were destroyed in the incident because the wires were broken."

Yankton is the kind of town you would expect to find in America’s heartland, surrounded by cows, wheat, corn and a sprinkling of manufacturing plants. It’s mostly conservative, mostly white and bitterly cold in the winter (except for a two-day heat wave last month, when highs hit 45 degrees).

It’s also a quirky town full of surprises, where the lingerie shop thrives, hot real estate is near a federal prison camp, and the high school has an indoor pool with a two-story water slide.

"These are half as much as they cost in Sioux Falls," says Janet O’Hara, proprietor of Donna Mae’s Lingerie, pointing to her display of $34 acrylic sex toys that are popular with farmers’ wives. Also popular is blue lace lingerie, which many men buy for their ladies.

Deepening her voice to imitate her male customers, O’Hara says, "Yeah, I think she’s about a 2X."

LIVING IN PALO ALTO

More on Yankton later, but now a visit to Palo Alto, where that average house is not just a place to kick off your boots, it is, well, A Lot More:

"It’s an event, a theatrical event, to put a house on the market in Palo Alto," says Miles McCormick, a local real estate agent who has sold more than $300 million in properties there in the past seven years.

Before a house goes on the market, McCormick pays decorators to remove all the owner’s furniture and redecorate the home.

He hires a masseuse for real estate agents previewing the property and hopes they will jump on their cell phones immediately, telling buyers, "You have to see this house. Now."

More than a lavish home, what people want is the Palo Alto experience, "unpretentious pretentiousness," McCormick calls it, that leads the mega-rich to buy a ranch-style house in an understated, "Leave It to Beaver" neighborhood rather than in a gated country club community.

The desire of Palo Alto’s rich and famous to live in an average home has pushed the cost of that average four-bedroom home higher than anywhere else in the United States. Beverly Hills comes in second, followed by La Jolla and San Francisco, according to the same survey.

Still, those who spend millions on a house in Palo Alto frequently aren’t satisfied. So they spend more, doing things like jacking the house up from the foundation and digging a basement to hold a state-of-the-art home theater or a wine cellar — sometimes both — that requires separate rooms to hold all the electrical panels.

"People who buy here want to feel like they’re living in grandma’s house they visited on the East Coast as a kid — grandma’s house with all the bells and whistles," McCormick says.

If a house does not meet buyers’ picky preferences, if it’s "weird" or if it doesn’t sell in the first three weeks, the price will dip. In one such instance, a home sold for down around $900,000 while a dirt lot directly across the street went for $1.5 million.

It’s all worth it, residents say, to live in a town where schools rate high,

block parties rule, and City Council agendas are filled with debates on leaf blower noise and left-turn-lane placement.

Back in Yankton, the rich are not without their high-priced houses, but it’s a matter of scale. The golf course boasts the town’s most expensive home (a 5,000-square-foot monster that at $665,000 would get you an Eichler on the wrong side of the expressway in Palo Alto). The area along and overlooking the Missouri River is exclusive, with houses in the $200,000 to $300,000 range. Property values are also increasing near the federal prison work camp, located smack in the center of town.

Yes, there is a federal prison camp — a no-fences compound where criminals live — in the geographic heart of Yankton. The camp used to be Yankton College, a source of local pride that went broke in the 1980s and was sold to the federal government.

"That’s the best thing that ever happened, almost," says Jeff Fejfar, a real estate agent with Coldwell Banker in Yankton.

The grounds have been spruced up considerably by inmates, and a public road runs through the middle of the prison.

Children can walk through on their way to the elementary school, which is directly across the street.

WELCOME TO ‘CAMP COOKIE’

Such amenities make it a top pick for prison workers who move throughout the federal system. It has a nickname among its nonviolent white-collar prisoners — they call it "Camp Cookie" — and employees who want to live next to the pastoral campus have pushed housing prices up.

The government jobs also help the town’s economy, which is fairly diversified.

Yankton’s largest employer is the Sacred Heart Regional Medical Center, started by Benedictine nuns whose monastery is close by. Yoga is offered every other Thursday.

Also near the hospital is Mount Marty College, a private four-year institution that is home to 600 students.

The state’s mental health hospital is north of town, employing 530, and thousands of people work at the many manufacturing plants, making $10 an hour on average.

A typical family makes $44,000 a year, free from a state income tax, and unemployment is low at 1.7 percent. In Palo Alto, average families pull in $117,000 a year, and unemployment is similarly low, at 1.3 percent.

Paychecks go much further than in Palo Alto, with basic things like gas, milk, eggs and ground beef costing significantly less than in the Bay Area. A gallon of milk at the HyVee supermarket in Yankton costs $1.87, and ground beef sells for $1.79 a pound. No chi-chi suburban food emporia for Yankton, but then again, where in Palo Alto can you routinely find bison meat ($3.99 a pound)?

Perhaps because Yankton is the area’s regional center — boasting a Wal- Mart, Kmart, shopping mall and five-plex movie theater — the town’s top selling point, like Palo Alto’s, is its school system.

Yankton High School, a $20 million building funded by both the school district and the city, has an indoor pool, two auditoriums, a basketball court with a parquet floor and an intricate computer network. It’s the type of school that even Palo Altans would brag about, if it were theirs. South Dakota as a whole has the most wired K-12 school system in the country.

Student organizations and sports teams win competitions often, and the football team took home the state championship last fall.

Students in the wood-shop class build a three-bedroom house that is auctioned off each year. Last year, the winning bid was $33,000 for the home, which undergoes extensive inspections throughout the process.

The student-to-teacher ratio in all schools is 16-1, and the high school dropout rate is 4 percent. Nearly 60 percent of graduates go on to college.

But while the school helps students excel, they’re often propelled right out of the state. There is no Stanford or UC Berkeley to draw young people, and South Dakota suffers from a brain drain, meaning that the most successful students take their talents elsewhere, depriving the area of smart and motivated young people.

Many go to the University of Nebraska, the University of Minnesota and other large regional schools.

THE OLD AND THE RESTLESS

"Old people come here to die, and young people leave," says Brian Brockemeier, a high school senior who is thinking of attending the University of Nevada at Las Vegas.

Brockemeier, along with other students, started a downtown activity center called Club 83 to stave off boredom. It’s one of three youth centers in the town and recently got cable television, a huge plus.

He says he struggles with staying in South Dakota and adding his brain power, or leaving for a place already thriving.

"That’s the big debate," he says. "I’m torn right now."

In fact, the town’s most famous son, NBC news anchor Brokaw, made it big after he left. So did Lawrence Welk, who started on a Yankton radio station but moved to television in Omaha, Neb.

Explorers Lewis and Clark came and went, as did Gen. Custer shortly before his demise.

But the smallness that young people flee is exactly what draws some people with children to Yankton. Tim Giesen moved from Minneapolis in 1995 because his wife at the time was attending college in the town.

He is divorced now, but he recently bought a 15-acre farm with a three- bedroom home north of town for $75,000.

The people are friendly, he says, and he does not have to worry about locking his doors or fear for the safety of his kids.

"They go out in the morning, come back in at lunchtime, then go back out," Giesen says. "We’ve even thought about getting walkie-talkies so we don’t have to keep yelling."

That’s the whole of it for many residents. Yankton is not on the national map and is not a center of cultural innovation like the Bay Area. Such places are hours away, along with their ills of extreme poverty, crime and traffic.

What is present in Yankton, many residents believe, are life’s essentials.

"We’ve got good schools, a good community and good jobs," says Fejfar, the real estate agent. "That’s all you could want in the world."

Many people do not lock the doors to their homes or cars, because more likely than having something stolen is having a batch of cookies slipped inside, he said.

Hunting and fishing are major pastimes and are easily accessible at the 25- mile-long Lewis and Clark Lake, which draws more than 1 million visitors to the town each year. Bald eagles nest in nearby trees during the winter.

All of this needs one big fat caveat:

Despite its charms, Yankton is in South Dakota.

That means diversity is measured largely by the area of Germany from which one’s ancestors emigrated. The town is 94 percent white, 2.5 percent Latino, and blacks and Native Americans each represent 1.6 percent of the population. By contrast, Palo Alto is 76 percent white, 17 percent Asian, 4.6 percent Latino, 2 percent black.

Major culture and economic centers like Minneapolis or Kansas City are hours away from Yankton. "We don’t have opera. I probably wouldn’t enjoy it anyway," says Duane Potts, who has a farm in Nebraska but has a family home in Yankton because of the schools.

Nightlife booms in Yankton but consists of taverns lining Third Street, or the Icehouse, best described as a drive-up bar. (The lingerie shop outfits the dancers at the Cockatoo, the town’s strip club and the only such establishment for miles.) Restaurants are scarce, and a bottle of Napa or Sonoma wine costs about $5 more than in the Bay Area.

PASS IT AROUND

The town bookstore’s selection is anemic, and nowhere can you buy the New York Times (or The Chronicle, for that matter), though Yanktonians have learned to cope: one circle of friends has each member subscribe by mail to a national newspaper or magazine and then they all avidly share the material with each other, much like sharing rations during World War II.

Those accustomed to big-city anonymity won’t find it, as visitors regularly run into people they met a few hours earlier.

And it snows.

But for those who can handle — or who desire — the differences, selling a Palo Alto property and relocating to a place like Yankton would put a large wad of cash in the bank account.

Natives would know you’re from out of town, but you would be well received, says Dave Cornemann, owner of the town’s major coffee shop.

"Unless of course you’re coming for the wrong reasons," he says. "We have a prison in the middle of town, you know."

E-mail Wyatt Buchanan at [email protected].

http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2003/01/02/MN234651.DTL