Local homebuyers facing pressure, higher prices amid housing inventory shortage
According to brokers, homebuyers aren’t able to buy homes for just the asking price.
RAPID CITY, S.D. — Almost since the pandemic started, the housing market in the Black Hills has been a tough place for buyers.
Brokers say homes have been selling quickly, with the average time on the market being between 16 to 20 days.
According to Wilcox and many other sources, in the past year, the average selling price for a home in Rapid City has risen around 15 percent. Prices last year started at around $280,000 and have risen to around $323,000.
Wilcox also said that the industry has slowed down a little in terms of multiple offers being put on homes. He also pointed out that those who can’t buy the homes are left to rent and that rental prices have also skyrocketed.
If you compare that to the average salary in a Rapid City household, which is $73,000, along with the advice given by financial experts who say that a good range to pay for housing with that salary is 25 to 28 percent, and you should be able to afford a home in the neighborhood (pun intended) of about $350,000 to $450,000.
But experts in the industry say that’s not what’s happening in the Black Hills.
Rick Kahler, the President of Kahler Financial Group says that clients he meets with who are looking to buy a home are seeing competition with the asking price of homes.
Kahler said that he’s being told there are around 70 total homes on the market.
“In the last week, I’m told the three houses that went on the market, all of them received offers of around 10 percent above the listed price,” Kahler said.
In other words, if you’re looking to buy a $350,000 home, you could actually spend more towards $385,000.
That’s not even taking into consideration the work on financing you already need to have done to win the race to an offer.
With both base price and competition high, buyers are feeling the pressure.