More of our lives than ever before are taking place inside this single structure we call ‘home’, and with this change has come the desire to make appropriate adjustments. Whether this means finishing the basement den to serve as a school station, or realizing your current space lacks the accommodations you now find necessary. If a change of venue is required to accommodate the growing needs of your family, we give you five reasons why now is actually a great time to build a home.
1. Low Mortgage Rates
At the beginning of the pandemic the real estate market felt the sharp decline in activity other sectors experienced, but thanks to the government significantly lowering interest rates in 2020, the real estate market was able to reverse the downward trend. This resilience buoyed by homeowners flooding the market to take advantage of historic low interest rates and lower monthly mortgage payments has supported the overall recovery of the US economy. Since mortgage rates fluctuate and have been projected to rise in the near future, now is a great time to lock in a low rate. A fixed mortgage rate protects investors from the variability of market increases.
2. Price Increases as Time Passes
On average Home values go up 3-6% each year, but experts are forecasting almost twice that in 2021 while interest rates also plan to rise. What does that mean for you? You will pay more money in the future for the exact same house you could build now. Building now means you can lock in at a lower price and then that growth in the market price now means more equity (aka $$) for you! Translation: you just turned the lemon of rising costs into lemonade!
3. Low Housing Inventory
The Sioux Falls housing market is approaching a record low for available house inventory, meaning we are currently in a sellers market with far more buyers than homes for sale. There are a couple notable reasons for this trend. As mentioned, mortgage rates are low and buyers incentivized by the corresponding low monthly payments have flooded the market and created an overall shortage in homes available. In addition to this, Millennials are ‘coming of age’ and account for the largest group of home buyers at 38%, according to the National Association of Realtors’ Home Buyers and Sellers Generational Trends Report. Due to the shortage in available inventory, many buyers are unable to find a home that suits their current needs, or are unable to match the bid of other buyers vying for the same property. For these reasons, some are deciding to build. You’ll find over 250 new lots to choose from this summer in almost all of our neighborhoods!
4. It’s a great time to sell
As we mentioned previously, experts expect home prices to raise significantly throughout 2021; however, in 2022 they anticipate that growth to slow back down. Which means with the low inventory and eager buyers of 2021, your house value has a higher markup right now. Therefore, it’s a great time to cash in and re-invest in a new home better suited to your family’s needs with our new normal of being at home more.
5. Stable Local Economy
Sioux Falls boasts a resilient local economy—unemployment rates half that of the national average, low crime rates, and competitive schools make it a desirable community to build a life in. And as many across the nation say goodbye to large cities, Sioux Falls and small cities like it are attractive relocation destinations. The city also has a strong industrial economy and serves as an industrial supplier to surrounding farming communities. In addition to this, the business sector has a tradition of stability and at the close of 2020 the anticipated building of an Amazon Warehouse in the city became official. The overall strength of the local economy provides confidence for builders’ home values will be sustained and are likely to increase over time.
Regardless of a ‘good’ or ‘bad’ economy, what ultimately determines the right time to build a home, is personal circumstances such as your financial status, job stability, and budget. If these personal circumstances are positive combined with the reasons we discussed, now is a great time to build. We can help you with the starting step which usually is deciding where your new home will be located. We currently have lots available in eight different neighborhoods in the area that vary in price, size, location, and amenities. We can walk you through choosing a lot as well as provide a list of builders who have built in the neighborhood. Peruse our neighborhoods online and give us a call to answer questions and get you on your way to a new home!