Sioux Falls real estate market starts the year stronger than 2019

Feb. 13, 2020

This paid piece is sponsored by The Allen Edge Real Estate Team.

Hi, I am Tara Allen, CEO of The Allen Edge Real Estate Team, Realtor, wife, mom of two beautiful girls, coach for the No. 1 real estate coaching company in the world — MAPS Coaching — and  a John Maxwell certified speaker and trainer. 

My latest role as your trusted real estate adviser is bringing you a monthly look at what’s happening in the Sioux Falls real estate market. I’ll be analyzing the numbers, sharing my experience, surveying my fellow Realtors and talking to them to explain what’s really happening on the ground in our industry.

I was fortunate to have a quick start in the business with a lot of hustle and determination. I was named Keller Williams Realty International Rookie of the Year, selling 65 homes my first year in the business. Growing a specialized real estate team was the natural next step. As I discovered my passion for growth and helping others grow, I grew a team to be able to provide more value to our clients and more opportunity for those in my world. After coaching my team members and discovering the energy it gave me, I became a coach to help other agents across the U.S. achieve their goals as well. Speaking, teaching, goal-setting, business-building, challenging people and getting people to THINK BIGGER is my love language! 

On The Allen Edge Team, we believe it’s more than just real estate. It’s building lasting relationships, making an impact and living our best lives intentionally. This year, we have so many exciting things we will be doing to give back to our community and provide as much value as possible. Through these market updates, my goal is to provide valuable information about the real estate industry and keep you informed about what’s going on in our local market through my research, experience and talking with other Sioux Falls Realtors. Enough about me and our team, let’s get to real estate. 

With that, here’s how the year is starting off in Sioux Falls real estate.

It is looking to be a stronger start to the year in 2020 compared with 2019. I am sure it has nothing to do with our mild winter, but thankfully on Groundhog Day, Punxsutawney Phil saw no shadow, predicting an early spring. We all know that helps our housing market in South Dakota. 

New listings in January were down 2.8 percent, but that is much better compared to down more than 10 percent in 2019. Closed sales were up 8.6 percent in 2020 versus down 7.5 percent in 2019. 

As for The Allen Edge Team, our business also is seeing a much stronger start to the year. Our listings taken in January were up 75 percent compared with last year, and our closed sales were up 220 percent. We are seeing a lot of buyers come out of hibernation. Sellers, on the other hand, are moving a little slower, just as in previous years.  

Here’s a closer look at what happened in the market in January:

Our inventory overall has been around a four-month supply for the past year. And while we saw fewer multiple offers than in the past, when homes were priced right and properly prepared, they still sold quickly.  

I would predict inventory will remain low based on the research I have done. If we take a closer look at specific price ranges based on how many homes sell per month in that price range, home prices from $500,001 to $900,000 are moving slower, with higher inventory of six to 8.4 months’ supply. Homes priced at $100,000 to $300,000 have less than a three-month supply of inventory. 

When you see inventory of less than four months, that tends to favor sellers. When you see it at more than six months, it tends to favor buyers. This is great news for a move-up buyer. At the end of the day, a home will sell for what a buyer is willing to pay and a seller is willing to sell for. 

From the research I have been doing, two real estate trends seem to be consistent for 2020:

  • Prices will continue to increase. According to Freddie Mac, home prices grew slower in 2019 at 3.3 percent than in 2018 at 5 percent. For 2020, real estate gurus predict that home prices will rise but at just not as big of an increase. They are predicting 2.8 percent in 2020. So you’ll likely see home prices continue to creep up, just at a little slower pace. 
  • Interest rates will remain low. According to Freddie Mac, mortgage rates are expected to remain low over the next two years, averaging 3.8 percent in 2020 and 2021.

What does this mean?  

Buyers, don’t wait until home prices go down. They are predicted to rise again this year, and it is important to start building your own wealth rather than someone else’s. Just be smart, save your money for a bunker, don’t live beyond your means, buy a home that fits comfortably in your budget. 

Sellers, if you have been in your home for over seven years, it might be like finding a pot of gold in your backyard. Home prices have increased vastly over the past seven years. 

Investors, talk to your Realtor to watch for deals. There are deals in every market no matter what the market is. 

If you are thinking of buying, selling or investing in real estate, reach out to your real estate professional. Be proactive in your search. I know low inventory causes several challenges, but not wanting to list until you find something you like sometimes causes you to miss out on a home, affordability, limited lots in areas and so on. There are solutions and a strategy that can help you have the best chance possible to get into your next dream home, maximize your dollars and reduce the stress of making the move. 

Let’s have an amazing 2020! Hope you all are crushing your 2020 goals so far this year! Yes, you can! Make it happen my friends!

If you have a question about anything to do with homes, the process or the market, please let me know, and I would be happy to touch on it in these market updates. You can email me at tara@allenedge.com or text me at 605-929-5010. 

And if you don’t have a real estate professional, one of our specialists on The Allen Edge Real Estate Team would love to have a FREE consultation with you to figure out the best plan for you and your family.

Thank you for reading,

Tara Allen

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Sioux Falls real estate market starts the year stronger than 2019

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