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Sioux Falls Home Prices Could Rise

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The South Dakota real estate market has seen its ups and downs over the past few years.
In Sioux Falls home prices have actually dropped slightly in two of the past four years. But according to a company that tracks trends, home prices are likely rebounding.
Eric and Karissa Sjaarda are looking for their first home. With interest rates on a 30-year mortgage hovering below 3 and a half percent they are looking to take advantage of the best rates in more than 60 years.You can get a better rate now than your relatives could in the 19-50's
And those low rates are good news for buyers like the Sjaardas.
"We've been renters for a while, we've been in different cities and we're at a point where we want to settle down the interest rates are great so now is a great time to be looking," said Eric.

But there's also good news for sellers. Home prices appear to be starting an upward trend.
Forecast-Chart.com publishes forecasts for the trend in home prices in 380
Metropolitan Areas. According to their calculations, in Sioux Falls, there is an 83% chance home prices will be higher in 2013 than in 2012.
The latest data shows home prices in the Sioux Falls Real Estate Market have
gained 1.09% in 2012. That's good news for sellers when you consider home prices dropped in 2011 and in 2009.

According to Realtor Jackie Fischer when we compare the Sioux Falls housing market to other parts of the country, we remain in calm waters. We haven't seen the dramatic ups and downs. For example the worst real estate market last year was Brunswick, GA, with depreciation of -7.7%. The top market during the last year was Midland, TX, with appreciation of 11.2%.

Fischer says she doesn't expect prices to increase dramatically, but if they do increase, she hopes to bring more sellers to the market.

“We've got a little bit of a shortage now, I know a lot of people are sitting on the fence just kind a want to see what they are going to do, interest rates have brought the buyers out in droves and so what has happened is we've got a buyers market however as prices start to creep up and more and more sellers are going to be qualified to move up,” said Fischer.

Realtor Mike Winter agrees there is a shorter supply of homes on the market, and that goes for newly built homes as well.

"I work with a couple of contractors, they usually build several spec homes every year right now they are so busy with custom homes that I won't have any spec homes to sell this spring. But that's good because those folks who are buying custom homes will then in turn sell their existing homes," said Winter

Also of note, a major tax provision survived the fiscal cliff. Congress did not touch the mortgage interest deduction. Which is good news current homeowners and crucial for future homeowners like Eric, Karissa and their one year old son James.
According to figures released by the city of Sioux Falls, new home construction was up in 2012. A total of 628 permits were issued for single-family homes compared to 348 in 2011.
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