Starting the Year off Right

Watch on your mobile device >>

2013 will be a phenomenal year in real estate.  In 2012 we saw a tidal wave of people coming into the market.  People decided they wanted to spend their money on real estate, which was definitely a good choice because homes are affordable with interest rates hovering at record-low rates and prices being where they are. The projections are for both rates and prices to increase so people are jumping into the market. 2012 actually destroyed 2011 in sales—and we’ll see another big jump in 2013.  Although the numbers won’t be at 2006 levels, they’ll be at normal levels.  

Demand will also increase.  If demand is up and supply down, the prices will go up.  We believe the demand is coming very strong because of interest rates.  Just take a look at mortgage rates over the past two years—we’re seeing they’re a little lower than the week before.  The projections are they will inch up over the next year, but right now they are hovering around 3.5%. 

What about home prices?  According to the Home Price Expectation Survey, projections of where housing prices will be at the end of 2013 are up.  Basically, several entities take a guess based on their analysis at where prices will be.  JP Morgan predicts prices will increase by 9.7%, Capital Economics by 9%, Freddie Mac by 3 to 4%.  These projections are a lot like asking 100 people to guess how many jelly beans are in a jar; some will guess too high, some too low, but the average will be close to the number in the jar.  That’s exactly what the Home Price Expectation Survey is. Over the next couple years, the prediction is 3.3 % appreciation on an annual basis.    

What’s happening locally in Sioux Falls is all very positive.  Our actual number of listings for December increased 3%; the increase in pending sales was up 42%; and inventory was down 18%.  Top those numbers off with the median price of a home increasing by 10% to $149,000 and days on the market down by 20% and the market looks great.  Home absorption or supply was also down 31%.

~

So if you want to get top dollar for your property, you should take advantage of the low inventory.  Here’s the thing:  supply and demand affect what you’ll get for your home.  When everyone who has been thinking about selling their home puts their home on the market is not the time to dive in—if you want to get the most out of your home.  If you wait until spring (the typical time people thinking of putting the for sale sign up), you’ll have lots of homes to compete with.  And when the supply of homes goes up, the price you’ll get for your home inevitably goes down.  At the end of the day, you have a better chance at success if you decide to sell now, instead of waiting until all the Joneses get into the market.      

Call us today so we can build a strategy to get you the results you want.  You can reach us at 605.370.5523.