South Dakota Mortgage Demand, Home Sales Increasing

The Sioux Falls Argus-Leader reports that as the South Dakota city continues to grow, so does the number of homes sold.

It seems like simple logic – more people move to an area, therefore more homes are sold. Barton Hacker, CEO of the Realtor Association of the Sioux Empire, believes there’s more to it than that, though.

“Some of it is just a function of population growth,” Hacker said. “But there’s got to be a reason for that growth.”

Some of those reasons, Hacker said, are a strong economy, prices leveling off, and even declining in some areas, mortgage interest rates being near historic lows and more jobs being generated by projects such as Sanford Health.

“That whole project is going to improve the quality of life in Sioux Falls,” Hacker said of the Sioux Falls housing market. “It’s not going to happen all at once, but it’s going to be huge.”

According to statistics compiled by the local South Dakota Realtors, 2006 broke a record high for the number of homes sold with a total of 3,600. That number broke the previous record of 3,595 homes sold in 2005.

Those numbers also revealed an increase of over 2 percent in residential home values, boosting values from $153,162 in 2005 to $156,641.

Bruce Berger, an agent with RE/MAX, attributed that increase to modest South Dakota mortgage costs and the types of home being sold.

“I think that has to do with more expensive houses being sold. The way I’m looking at the market, we don’t have a lot of houses in the mid-level price range,” he said.

Hacker doesn’t fully agree with that.

“Mid-range homes are staying on the market a little longer. But sellers are getting about 98.5 percent of their asking price. Industry-wide, it’s a very strong market,” he said.

Lisa Ottmar, public relations director for the Home Builders Association, agreed with Hacker.

“Interest rates are at historic lows,” she said. “A lot of people are thinking [home mortgage] rates are going up, but they’re still low. The economy is really good in Sioux Falls. Especially with the whole Sioux Valley - Sanford deal.”

To combat the negativity people are hearing about the housing market, area home builder and Realtor groups have joined together to promote a year-long campaign called “It’s a Great Time to Buy.”

That pretty much speaks for itself.

“Price levels here have not increased like some areas of the country have,” Hacker said said. “Sioux Falls is almost the perfect storm for home sales.”

SOURCE: Sioux Falls Argus-Leader