Sales for the beginning of the year in the Sioux Falls area started a little slow, but as weather normalized, sales took off. Low interest rates and an improving level of consumer confidence have kicked off a surge of buying.
Since then, inventory levels have shrunk and they continue to do so. This creates more buyer urgency, sales are quicker, and prices are escalating. Most of this is happening with the first two levels of buyers, but we are seeing it wave up to the next few levels as well.
We surmise home prices are up 5% since last fall for homes below $300,000, and predict we’ll see prices in the $300,000 to $400,000 range improve; albeit, not quite as well as the homes below. The brackets above $500,000 most likely will hold steady, although there is a possibility of some improvement if the economy gains momentum.
Interest rates have jumped slightly, that may have been a factor pushing quicker sales this year, but there is little reason to believe rates will go higher even though we hear plenty of rhetoric to the contrary. The Federal Reserve cannot allow rates to rise while economic indicators remain so low. Don’t expect to see mortgage rates higher than 4% for a 30 year mortgage all year.
We are also seeing better lending options. Some banks are now providing mortgages without any closing costs up front. The rate may be slightly higher, but the over package is better. Refinance packages are quite attractive too for those who prefer to stay put for now.
All in all, it’s a very good market, and 2015 will be better than 2014. We believe it is vital to have great clarity about why you are moving, be aware of all market conditions, and develop a comprehensive plan for success. Remember, The Tony Ratchford Group has a proven method to help you maximize your dollars, save you valuable time, minimize inconveniences, and most importantly help you find greater peace of mind knowing you are doing the right thing at the right time. Let’s visit about The Dream Home Process™. There is no cost or obligation. We invite you to call or text 605.359.4100.
Real Estate Broker, CRS, ABR, SRES