Lunar eclipse of real estate: Why Sioux Falls is both buyer and seller’s market
I hear this from potential clients a lot: “I know it’s a seller’s market. I know inventory is really low. That scares me — I won’t be able to find something to buy if I put my home on the market, or I want to wait until the market cools down so I can get a better deal.”
I then make sure they know: It’s a buyer and a seller’s market. And let me tell you why.
This real estate market is like a lunar eclipse. A lunar eclipse occurs rarely, and only when the sun, Earth and moon are exactly or nearly exactly aligned.
So, yes, it’s a seller’s market. We are seeing continued multiple-offer situations and incredibly low inventory. I searched last week for homes priced between $200,000 and $250,000 in southwest or west Sioux Falls and found just 11 options. In that same area, there are six options between $300,000 and $500,000.
But it’s also a buyer’s market, and here’s why.
This time last year, if you financed a $250,000 mortgage, your average interest rate was 3.875 percent, making your payment $1,175.
Today, that same $1,175 payment combined with the 2.75 percent average interest rate we’re seeing can get you a $287,000 loan.
That’s a real advantage for buyers. It’s a free, major upgrade in your home search – think of it like being able to add a three-stall garage, finished lower level or three bedrooms on the main level. Your dollars are going to go farther, and that could give you the buying power to look in a different price range or buy a less-than-perfect home and then make it your dream one.
It’s kind of like going to the car lot, trading your old car in and getting a newer car with more features for the same payment.
We’re seeing these factors show up in the monthly real estate report from the Realtor Association of the Sioux Empire, which showed new listings down 20 percent in June but closed sales pretty much flat. Buyers still want to buy – and it’s largely because of the interest rates.
Our buyer pool also seems to be growing in some unbelievable ways.
In the past two weeks, I’ve gotten four or five calls from people who want to move to South Dakota. Last week, I heard from a 67-year-old man who wants to leave Minnesota. A week and a half ago, a Seattle couple called and then came to visit for three days while I showed them houses. They love it here. People are responding to how we have not been as dramatically impacted by the pandemic and how we’ve been able to largely keep things open while they still feel safe here.
So what does that mean for buyers? You have to be ready to move fast, more than likely pay full price and not ask for concessions. Homes that are priced correctly are moving incredibly quick. Homes that aren’t will stay on the market longer, but unless it has been listed at least 30 days, don’t expect to bargain on price.
Instead, buyers need to connect with an agent who is aggressive, networking with other agents and constantly watching the market. I mean on an hourly basis – that’s how fast things are coming up and moving, depending on what price range you are in.
For sellers, make sure your home is ready to go, so as soon as you find your new home, you are ready to list. Have your photos ready. Be prepared to literally put it on the market within an hour of your offer being accepted on your new home. And if you want to be aggressive, see if you can be pre-qualified for a bridge loan or look at options for putting your house on the market and living somewhere else temporarily. Yes, it’s inconvenient, but it’s a way to make sure you don’t lose out on your dream home and maximize your dollars when buying and selling. A short-term sacrifice is worth the long-term gain.
See why I compare it to a lunar eclipse? Conditions like this don’t come around often, but they can represent an ideal time to be in the market – if you’re prepared and working with an expert.
Before I go, here’s my pick of the month if you’re in the market for a new home:
Don’t miss 6317 S. Wicklow Ave.
This four-bedroom, three-bath ranch home is a rare find in the Heather Ridge neighborhood and is offered at the new price of $449,900. That’s a fantastic value for 3,730 square feet – with three bedrooms on the main floor, a three-stall garage and tons of upgrades, including refinished hardwood floors throughout, a Jacuzzi tub and heated floors in the master suite, two family room areas and a screened-in porch plus a huge fenced-in yard.
Call or text me at 605-759-0411 to see it for yourself.
Thank you for reading,