We haven’t had much actual rain this spring, but we have had a showering of real estate sales.
It’s interesting to hear and read about how hot the market is. The truth is, one has to dial down into the numbers to get a complete read on market conditions. The early spring market is driven by first time buyers vacating the apartment life. Typically, landlords like to spread their leases out over a few months, renewing in the spring. March, April, May, and June are usually the biggest moving months.
Real estate sales are always the biggest in March and April, simply because the first time home buying market (under $200,000) has represented 71% of all sales this year. And, when we look at the second tier, or the move up buyer, it accounts for 90% (under $300,000).
Some of the reason for the ‘talk around town’ is that we have had a shortage of homes for sale in comparison to the demand. That number is changing as we move further into spring and more homeowners are putting their homes up for sale; so, the speed of a sale and increased prices will begin to move into a more normal market. The number of days on the market for a house to sell is now 98.
Thankfully, interest rates are still in the 3.5% range for a 30 year mortgage and 2.75% for a 15 year mortgage and will continue to fuel buyer interest and help support steady prices. The run up in home values from last fall has now flattened.
We continue to remain relatively optimistic about the market in general. The most important factor for a healthy market is household income, which has been nearly flat for more than five years. The Sioux Empire has had the benefit of steady growth and a diversified economy; still, incomes have not increased enough to keep up with the cost of living. The extra money it costs to move up to a bigger or nicer home isn’t there. The upper brackets will feel the weight of this economic drag the most.
I’ve had some people ask ‘when do I think it will change?’ and the answer is probably not until a pro-business-growth policy is adopted nationally. That’s when we will see more real jobs created and higher incomes. In the meantime, we will enjoy a healthy spring market!
I would be remiss at my job if I didn’t offer you an opportunity to visit with us about our Dream Home Process. It is designed to help you find more clarity about when, how, and why you should move. It is a proven method to maximize your dollars and save you valuable time. We invite you to call.
All my best