South Dakota is alive and booming!
Jobs always drive the economy, and with high employment in the Sioux Empire, real estate is experiencing a strong seller’s market in nearly every price bracket.
We expect to see a booming market for the next decade; here is the reasoning. In 1981 mortgage rates reached a high of 18.5% for a 30 year loan, inflation was out of control, and real estate along with the economy was in the tank. All of it was caused by at least a decade of poor economic and governmental policies. Before the end of the year, the Economic Recovery Tax Act was passed reducing regulations and creating the greatest income tax cut in history, this plus better monetary policy, started one of the greatest recoveries and economic growth periods in USA history.
In 1982, the recession ended and in 1983 the GDP rate was 4.6% followed by a whopping 7.2% in 1984. This solid economic growth continued until 2007 with one short recession in 1991.
We are seeing many similarities today regarding governmental policies. According to recent data, since the tax cuts, South Dakota has added more than 16,000 jobs plus a 24% increase in small business applications. Unemployment in the City of Sioux Falls is under 3%. Wages are growing and household incomes are up substantially.
One can always debate what economic model they think is best, but results speak clearly today; Free Enterprise, Lower Taxes, and greater Freedom has set the stage for this remarkable economic path. It happened in the 1980's and 1990’s, and it’s happening now.
Homeownership is up several points over the last few years with a 63% participation rate. More homeowners, or hope-to-be homeowners, have enough confidence in their current job and cash flow to engage in buying a home or move-up ownership again. This could create an appreciation rate of 4% to 5% a year over the next five to ten years. Now is the ideal time for both buyer and seller to take advantage of good times and low mortgage rates.
Tony Ratchford, Broker for KW Realty Sioux Falls, CRS, ABR, SRES, Luxury Homes Institute Member
