Let’s talk about if the market is actually crashing right now.
Hey guys, what's going on? My name is Christian Morrison and I am a local real estate agent here in the Rapid City/Black Hills area, and this is Rapid City Real Estate News, where we do a weekly video on what is happening in the real estate market here in Rapid City. Now today's video is going to be pretty short and to the point, we are going to go over a little bit of the numbers and things that are adjusting with it, but the main thing I wanted to talk about today is people talking about the market crashing right now, especially here locally in Rapid City. Real estate is a very hyperlocal subject, meaning that the market that you are in exactly, your town, your city, is way more relevant to you than the nation, but the nation has some trending factors as well.
Now many of you probably already know this, but the difference between a correction and a crash in the real estate market, is a crash is more than 20% negative in housing prices in a year and a correction is less than 20%, but still negative. So I am going to speak just to Rapid City and the Black Hills itself, my personal prediction is that we are definitely not going to have a crash. I really don't think we will have negative 20% in values or more. I had somebody the other day, tell me that they think we will have a negative 60%, that was just some consumer speculating, but I do not see how that is possible, for a multitude of reasons that I have talked about in previous videos, but if you look at the market as a whole in the nation, it is correcting right now, meaning it is going down slightly, from what it has been doing. If you look at my last video, I talked about what our market is doing here, the last video, “2021 vs 2022”, we are up for the year, but since July or June, we are down about 1% in value. So that would be technically a correction in that span of time, 1% negative value, but for the year we are still going to be up, and I think moving forward we will probably be in that 5-10% appreciation range. Everybody seems to think this is the worst market of all time, but I will tell you right now it is definitely not. If we had not had the last 2 years, to kind of have our brains say, this is what our market is, we would say right now is a crazy hot market. This last week we had 38 houses hit the market, which is a good number, 8 of those went under contract, in the last 4 weeks it's been 5, 5, 5, 5 going under contract every week, so now that number is going up a little bit, almost double, 5 to 8. 22 houses sold, median sold price was a little bit less than the list price there, and we have 206 active houses on the market. So the active houses on the market has been the same for like the last 3 months, 200, 200, 200, 190, 206, it's like right in that range, and if you were to look at 2019, you know before all this craziness, we had like 500 houses on the market at a time. So we still are very low inventory comparatively. And if you look below that, right now, today's interest rates are at 7.24%, most places are going to buy down the interest rate a little bit, you're going to be below 7%. That interest rate has been the same for a while, you know I've heard people saying, say to their clients, other real estate agents, “Now is a bad time to buy” and I’m like “how do you know that?” Nobody actually knows exactly what is going to happen, but i don't understand how now is a bad time to buy something, when they are saying that interest rates are probably going to go up to 10%, well if that is the case, your 7% interest rate seems pretty sweet, compared to a 10%, and if the reverse is true, and they go down to 4%, then you just refinance into that. I don’t think now is a bad time to buy at all, personally. I think it's probably a decent time to buy, because there are more options and you could have another boost, when the next election comes around and they try to drop interest rates to get more votes or whatever right? But now a couple other little things, the under $300,000 range, we have 48 listings available in the rapid city area, so if you are looking at that sub $300,000 range, you have a lot of options, which is amazing compared to the last couple years, 2.5-3 years. Median price is $233,000 there. So you have some affordable houses you can buy, it's amazing. The $300,000-$500,000 range is the biggest range of houses we have. We have 103 houses in there, median price is about $380,000, and then above $500,000 there is quite a bit of option as well, 56 houses, with a median price of $684,000. Now, for a lot of people saying that that upper price point is what is going to get hit the hardest, I had a listing we put on last week, we had multiple offers on it, and it was in the luxury price point, about $800,000. So there is definitely a lot of demand at that price point still. There are a lot of people out there looking to buy, as long as the house is nice, in a nice area, and that type of thing. If it is a dump for $800,000, they probably aren't going to buy it. But if it is a nice house in a nice area, it's going to sell right away.
Now this wraps up my rant for the day guys, if you have any questions, concerns, if you want to talk to me about anything real estate related in Rapid City, hit the link below, where is says “schedule a call with me”, and it'll block out a 15 minute section of my calendar, and I'll give you a shout and we can talk about whatever you want to. Thanks for watching guys, I'll see you next week! Peace!