SF actual property gross sales to sluggish in 2023
Posted On March 4, 2023
SIOUX FALLS, S.D. (KELO)–2022 was a record breaking year for real estate sales and new construction. But in this week’s market outlook, Bender commercial Real Estate is predicting a slow down in 2023.
We break down their data in tonight’s your money matters. We have to talk about inflation. It’s a topic that fueled a lot of this year’s market outlook.
“It impacts everything, anyone who is borrowing money, which is probably 95 percent plus of our transactions,” Bender Commercial President Reggie Kuipers said.
It’s why Bender Commercial is predicting a slow down in real estate deals this year.
“It’s not a doom and gloom prediction, it’s just an interest rate, simple math. For example interest rates were roughly three percent in January of last year, now on a commercial transaction it will be about six and a quarter,” Bender Commercial Principal Nick Gustafson said.
But while the world of commercial real estate may be slowing down…
“That’s ok, we’ve been running really really hard for the last two or three years especially in Sioux Falls, look for this year to be more of a normal year, but still really strong,” Kuipers said.
Historically speaking, the city of Sioux Falls is still in a period of growth.
“We feel pretty good in South Dakota…we still have a robust business environment here, it doesn’t feel the same in New York,” Kuipers said.
The market outlook highlighted the number of W-2 employees coming to the state increased by nearly four percent last year–a big win in the nationwide competition for employees.
“Right now there are 10 million job openings in the united states, there are five million unemployed,” Kuipers said.
But while the South Dakota economy may be going strong, Bender expects investors to continue a cautious approach in 2023.
“In our office alone, we had 520 acres that were under contract and had a closing date for 2022, and those developers decided it wasn’t the time to move forward with that and canceled the deal,” Bradyn Neises with Bender commercial said during the land market presentation.