Sioux Falls housing shortage challenges first-time homebuyers
SIOUX FALLS, S.D. (Dakota News Now) - Those looking for a new home in the Sioux Falls area are continuing to be met with the challenge of a housing shortage.
Since the middle of 2020, sellers have had the upper hand as there have been more people looking to buy homes, than homes available. Which can cause issues for those looking to be first-time homeowners.
“Very much a sellers’ market right now with the lack of inventory. February 2021 versus February last year we’re down about 50% in homes,” said the Realtor Association of the Sioux Empire’s Kate Patrick.
The Sioux Empire Housing Partnership helps educate future homeowners, including helping them determine how much they can afford.
“Ideally, you’re supposed to never spend more than 30% of your spendable income for housing,” Sioux Empire Housing Partnership President Jim Schmidt said.
Schmidt adds first-time homebuyers are looking at homes valued at around $200,000, in which those homes aren’t available for long.
“There aren’t many of those available and when they come on they are gone within a day, so the young couple that’s trying to find that first home really has a challenge,” Schmidt said.
And those new to buying, are having more competition as well.
“Definitely out-of-state people moving in, we’re seeing that influx as well and it is a great question of ‘where are all these people going to find homes,’” said Patrick.
Overall, the housing shortage can push homebuyers into bidding wars, which Schmidt is advising not to outbid your income.
“Maybe they are looking at their 30% level ability to pay, but they knot this piece of property so they’re willing to sacrifice and go to 40% of their spendable income, hopefully not 50% because that’s a recipe for disaster,” said Schmidt.
According to the Realtor Association of the Sioux Empire, February 2020 had 496 new listings, compared to 348 in 2021. They also expect this shortage to continue into the summer.
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