Living in Custer
The county seat at the door of Custer State Park, with real fine dining, a new hospital, and rental rules that flip completely at the city line.
- Population
- About 1,900 in 2020, trending slightly smaller
- Drive To Rapid City
- About 50 to 60 minutes
- To Ellsworth AFB
- About an hour and ten minutes
- School District
- Custer School District 16-1
A steady, settled town that happens to sit at one of the best park entrances in the country.
Custer trades commute time for access, and the access is exceptional. Before any of that, though, there is a rental rule here that decides what a property is worth to a buyer.
The rule that changes the math
In 2024 the Custer city council voted to prohibit new short-term rentals in residential districts. Existing rentals were grandfathered under conditional use permits, and those permits are non-transferable and expire on sale. So a residential-zone home with a rental history is not a rental you inherit. The permit ends with the seller.
Commercial zones are unaffected, which keeps some options open. And unincorporated Custer County has no zoning, no building codes and no county short-term rental permit at all, so the rules flip entirely the moment you cross the city line. Two houses a few minutes apart can sit under completely different regimes, and that difference belongs in the valuation, not in a footnote.
The town and the park
About 1,900 people lived here at the 2020 census, and the town has trended slightly older and slightly smaller since. That reads as stability rather than decline in practice: an established main street, a working county seat, and a housing market that moves on lifestyle rather than population pressure. Monument Health has built a replacement hospital in Custer, which matters more than most amenities when you are an hour from Rapid City.
The location is the reason people come. Custer State Park is at the door, with Sylvan Lake, Needles Highway, the wildlife loop and the September buffalo roundup. Crazy Horse Memorial is about five miles out, Jewel Cave about 13, and the Mickelson Trail runs through town. If your weekends look like that, an hour to Rapid City stops feeling like a cost.
Outside the city limits there are no county building codes, so on those properties I look closely at how the work was done, along with the well, the septic system, the recorded legal access and who maintains the road in winter. That is standard practice for country property here, and it is the part I handle for you.
My take
Custer is for people whose weekends are the point. Custer State Park is right there, Sylvan Lake and the Needles Highway are a morning drive, the Mickelson Trail runs through town, and there is a new hospital in a town of this size, which matters more than any amenity when you are an hour out. Life here is unhurried, the main street works, and the scenery is the best argument in the southern Hills.
Can you rent it out?
The resale trap comes first here: grandfathered permits are non-transferable and expire when the property sells.
- The city council voted in 2024 to prohibit new short-term rentals in residential districts.
- Existing rentals were grandfathered under conditional use permits. Those permits do not transfer and expire on sale, so a buyer does not inherit the right to keep renting.
- Commercial zones are unaffected by the residential restriction.
- Unincorporated Custer County has no zoning, no building codes and no county short-term rental permit, so the governing rules change completely at the city line.
- Statewide requirements still apply: a South Dakota sales tax license once you rent 10 or more days a year, 4.2 percent state tax plus 1.5 percent tourism tax, and Department of Health lodging licensure.
Short-term rental rules change, and they change fast. This summary reflects my research as of August 2026 and is general information, not legal advice. If rental income is part of why you are buying, verify the current requirements with the city or county that has jurisdiction over the specific address, and read the subdivision covenants, before you write an offer.
Schools
Custer School District 16-1 serves roughly 890 students across its Custer and Hermosa campuses.
- Custer High School is rated B by Niche and ranked 44th in South Dakota.
- It reports a 92 percent graduation rate with a 14 to 1 student to teacher ratio.
- AP coursework and arts programs are available.
- The district spans two campuses, so verify which one serves a specific address with the district.
School ratings are as published by Niche and GreatSchools using 2024 to 2025 data and change over time. Attendance boundaries do not follow city lines in this region and can differ parcel to parcel, so confirm the assigned schools for any specific address directly with the district before you make a school-driven decision.
Where to eat
Better than a town of 1,900 has any right to be:
- Skogen Kitchen, destination fine dining
- Black Hills Burger and Bun Co.
- Begging Burro
- The Custer Wolf
- Baker's Bakery and Cafe
Things to do
This is the strongest outdoor access of any town in these guides:
- Custer State Park, including Sylvan Lake, Needles Highway and the wildlife loop
- The September buffalo roundup
- Crazy Horse Memorial, about five miles away
- Jewel Cave National Monument, about 13 miles away
- Mickelson Trail access through town
The weather, honestly
Using NOAA 1991 to 2020 normals, Rapid City averages a 59 degree high and a 37 degree low across the year. January runs 37 over 16, July runs 84 over 62. Summers are bright, with the National Weather Service putting sunshine at 65 to 75 percent of possible.
Snowfall varies enormously by elevation, which is the single most useful climate fact in this region. Rapid City averages 48.5 inches a year. Lead averages 183.9 inches. Those two towns are less than an hour apart. Meanwhile the foothills corridor running from Rapid City toward Hot Springs, the so called banana belt, runs warmer in winter thanks to chinook winds that can push winter days into the 50s and 60s.
Those winds are not a rumor. Spearfish holds the world record for fastest temperature change: on January 22, 1943, it went from minus 4 to 45 degrees in two minutes.
For gardeners and anyone planning outdoor work, the growing season runs about 131 days, with last frost around May 22 and first frost around October 1. And the hazard to actually budget for is hail, the region's most common severe weather from late May through August. It is why I ask about roof age and roof documentation on every home I show.
Common questions
Can I keep renting a Custer short-term rental after I buy it?
In a residential district, no. The city prohibited new short-term rentals there in 2024, and the grandfathered conditional use permits are non-transferable and expire on sale. Commercial zones are unaffected, and unincorporated Custer County has no rental permit requirement at all. Verify the zoning and permit status for the exact parcel before you value a property on rental income.
Is an hour to Rapid City workable?
It depends on why you drive. For a daily commuter it is a lot, especially in winter. For someone working locally or remotely, it is a fair trade for Custer State Park at the door, and Monument Health's replacement hospital in town takes the biggest practical worry off the table.
Is Custer shrinking?
The population was about 1,900 at the 2020 census and has trended slightly older and slightly smaller. In practice that reads as a settled town rather than a declining one. People buy here for the setting and the pace, not for population growth.
What are the schools like?
Custer School District 16-1 serves roughly 890 students across the Custer and Hermosa campuses. Custer High is rated B by Niche, ranked 44th in the state, with a 92 percent graduation rate, a 14 to 1 ratio, AP coursework and arts programs.
Nearby guides
- Hot Springs
The southern Hills banana belt: warmer winters, a sandstone downtown on the Fall River, and a town growing again after decades of decline.
- Hill City
A central hills tourism town with the highest ranked high school in Pennington County, and the strictest short-term rental trap in the region.
- Rapid City
The region's hub for jobs, medicine, dining and flights, and the shortest commute to Ellsworth Air Force Base.
Keep reading on Custer
Rental rules in this region change at the city line, and in two towns the right to rent ends the day the property sells. Here is the town by town picture and the diligence I run before an investor writes an offer.
Water, waste, and legal access decide whether a rural property is a good buy. Here is the homework I do on every acreage transaction.
Our granite geology puts these counties in the EPA's highest radon potential zone, so elevated tests are common here. A high number is a negotiation item, not a deal killer.
My free buyer's guide, written for wells, septic, hail history and PCS timelines in this region.
Price, down payment, rate, taxes, insurance and HOA in one number.
Looking in Custer?
Call 605-490-2040 or send a note with your budget and timeline and I will tell you what is realistic here right now, including what has actually closed. You can also search every active listing in the area on my search site.
This guide is general information, not legal, tax, lending or financial advice. Facts and figures are cited from public sources as of August 2026 and change over time. Henry Roy is a licensed real estate professional with Ascend Realty in South Dakota. Equal Housing Opportunity.