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Sioux Falls Housing Market: The Big Picture and The Little Details Jeff Allen Director of Research Services [email protected]
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Transcript of Sioux Falls Housing Market
Sioux Falls Housing Market:
The Big Picture and The Little Details
Jeff AllenDirector of Research [email protected]
Today
1. Recent History of Sioux Falls Real Estate
2. Group Discussion: Consumer Challenges and Misconceptions
3. Break
Today II
4. Show, Don’t Tell: Using Market Statistics Intelligently with Clients
5. Group Discussion: The Uncooperative Seller Scenario
6. The Future of Sioux Falls Real Estate
Introduction: Supply and Demand
The guiding law of how markets operate.
The balance of supply and demand
affects everything.
“Sellers Market”
•Low supply, high demand
•Seller advantage
•Growing prices
•Quick sales
“Buyers Market”
•High supply, low demand
•Buyer advantage
•Flat or declining prices
•Longer market time
“Balanced Market”
•Neither side has a market-wide advantage
•Price growth and market times in line with historical norms
Recent History: Gradually Shifting to
Buyer’s Market
Gradually Shifting to Buyer’s Market
Gradually Shifting to Buyer’s Market
Gradually Shifting to Buyer’s Market
Prices Softening
Tougher Conditions for Sellers
Tougher Conditions for Sellers
Recent Surge in Home Sales
Small Group Discussion
1.What are the biggest challenges or misconceptions you face with today’s buyers?
2.What are the biggest challenges or misconceptions you face with today’s sellers?
Show, Don’t Tell
Using market statistics intelligently with
clients
Show, Don’t Tell
Statistics aren’t numbers,
they’re stories.
Don’t be scared.
Show, Don’t Tell
Statistics are more important
now than ever.
1) Unique market conditions2) Consumers have far more
information
Show, Don’t Tell
Provide knowledge at the expense of salesmanship.
It’s not always a good time to buy or sell. Tell a consumer that and
you have their loyalty for life.
Show, Don’t Tell
Use proof to back up your claims.
RASE market reports give independent third-party
verification.
Show, Don’t Tell: RASE Market Reports
Small Group Discussion
You’re making a listing presentation to a seller. They believe their house is worth far more than you do.
How would you make your case?
Use statistics from the Monthly Indicators Report, but what else would you say?
The Future of Sioux Falls Real Estate
Beyond 2009, the crystal ball is hard to read.
Sales are up, but some of the incentives driving the recent surge are temporary:
1. Historically low mortgage rates
2. $8,000 Tax Credit for 1st Time Buyers
First-Time Home Buyer Tax Credit
First-Time Home Buyer Tax Credit
First-Time
Buyers
All Other Buyers
August 2008
78 244
August 2009
119 171
+ 52.6% - 29.9%Q: What will happen when the tax credit
expires?
First-Time Home Buyer Tax Credit
Areas With Heavy First-Time Buyer Sales
Extension/Expansion of Tax Credit
The sequel won’t be as effective as the original
Sell-forward effect
Inefficient Use of Government Funds?
From “Help May Bring Another Bubble” Las Vegas Sun, 9.22.09
“We paid $8,000 to at least 1.5 million people to do something they were going to do anyway,” Jakabovics says....The tax break, due to expire at the end of November, is on track to cost $15 billion, twice what Congress had planned. In other words, it will cost $43,000 for every new homebuyer who would not have bought a house without the tax break.
Positive News: Improved Housing
Affordability
Positive News: Relatively Few Foreclosures
Housing Units Per
Foreclosure
1 Nevada 62
2 Florida 140
3 California 144
4 Arizona 150
5 Michigan 234
*Source: RealtyTrac
Positive News: Relatively Few Foreclosures
Housing Units Per
Foreclosure
1 Nevada 62
2 Florida 140
3 California 144
4 Arizona 150
5 Michigan 234
44South Dakota
3,027
*Source: RealtyTrac
Takeaway: the foreclosure crisis hasn’t and won’t hit Sioux Falls as hard as the rest of the country.
But more are coming down the pipeline.
Positive News: Relatively Few Foreclosures
Positive News: Relatively Healthy Job
Outlook
Trivia Question:
What two states are the Top 5 healthiest regions for employment located in?
Positive News: Relatively Healthy Job
OutlookCurrent
Unemployment Rate
1 Bismark, ND 3.1
2 Fargo, ND 4.2
3 Rapid City, SD 4.2
4 Sioux Falls, SD 4.5
5 Grand Forks, ND 4.6
Positive News: Relatively Healthy Job
Outlook
Positive News: Relatively Healthy Job
Outlook
Positive News: Relatively Healthy Population Growth
Positive News: Relatively Healthy Job
Outlook & Population Growth
Takeaway: Sioux Falls is weathering the recession better than most regions in the country and is growing.
This bodes well for housing demand.
Sioux Falls Outlook Summary
Sales are likely to dip down again in 2010
Buyer’s market into foreseeable future, especially in higher price ranges
Pending sales up for 3 consecutive months
Housing affordability up dramatically
Relatively few foreclosures
Healthy Job Outlook and Population Growth
In sum: optimistic long-term outlook.
Sioux Falls Outlook Summary
The only constant is change.
Stay on top of Sioux Falls housing market trends using RASE market tools:
www.rase-inc.org
Sioux Falls Housing Market:
The Big Picture and The Little Details
Jeff AllenDirector of Research [email protected]
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