Just a few weeks ago the 30-year fixed interest rates were being quoted at about 3.75%. Today we’re seeing 4.5%. That means it will cost you about $30,000 more today than last month to pay off the loan for Rapid City’s median-priced homes.

We’re also hearing that mortgage rates are expected to continue a general upward trend from here.

FIVE ESSENTIAL ISSUES IN EVALUATING INVESTMENT LAND Rapid City Home For Sale

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SOUTH DAKOTA HOUSING PRICES CONTINUE TO INCREASE ! Rapid City Home For Sale

How’s the Rapid City and South Dakota housing markets?  Well, these hard data from the Federal Housing Finance Agency tell it all.  While the TV and radio news follow the “blood in the water” of the abysmal U.S. market, we hear a lot less about the relatively solid Rapid City and South Dakota housing markets.  In fact, according to the FHFA’s HOUSE PRICE INDEX our local market has just kept right on going and going and going…

(Or if you’re lucky enough to remember John Cameron Swazye, here’s a twist on historical American culture: “Rapid City real estate…It takes a licking and keeps on ticking.”)

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THE POTENTIAL HUGE RISKS IN WAITING TO BUY RAPID CITY AND BLACK HILLS REAL ESTATE 

Mortgage interest rates are at an all time low.  You can buy $50,000 more home today than the median priced home two years ago, but with no higher payments.  That’s right, a median priced Rapid City home two years ago went for roughly $175,000.  Today you could buy one priced $225,000, and still have the same payments as if you bought the lower price at higher interest rates just two years ago.  The affect of the interest rate decline dwarfs the wildly popular, but comparably meager $8,000 Federal tax credit incentives of earlier this year.  The market is behaving somewhat blindly to the fact that the “Interest Rate Incentive” is more than SIX TIMES the “Tax Credit Incentive”!

Yet some home buyers we meet are playing “Russian Roulette” in delaying their home purchase.  Yes, the future is scary.  It’s human nature that many of us fear a little “risk of the unknown” far more than loss of an assured larger gain.  We know from the psychologists that such emotion-driven behavior is common.

Let’s consider a concrete illustration, just for clarity.

Assume for the moment that interest rates will go back up in the same way they came down. This is a reasonable presumption, given that Lawrence Yun, Chief Economist of the National Association of Realtors,” recently stated:  ““Mortgage interest rates … are expected to gradually rise to an average 4.9 percent next year, then rise to 5.8 percent in 2012. So, since October rates were 4.95% this time last year compared to 4.03% this week, then your monthly payment on a $175,000 (median price) houses last year would have been $96/month more than now.  That is an 11% higher payment above today’s principal and interest of $838.51 (see the Oct-2011 figure of 11% in the chart above).  So, if rates go up as much next year, as they went down last year, then your payments next year for the same house this year, will be 11% higher.  And if rates go up as much in the next two years as they went down in the last two years, then your payments will be 28% higher for the same house in two years.

Of course, if home prices on the same homes decline 11% next year, and 28% in two years, then the price declines would just offset the interest rise.  But how likely is it thatRapid City, the third strongest housing market in the entire country, will see home prices decline 28% in the next two years?  Zilch.  Zero.  Nada.  No way.  How do I know that?  Here’s how.  At the peak of Rapid City real estate sales during the national housing bubble, our average sold-price for residential housing was $178,821.  Since then, during all the national blood-letting,our local average sold-price has declined only 1.3% to $176,527.   That’s just peanuts.

From that, I conclude that home buyers who aresitting on their wallets, waiting for the Great Pumpkin to drive Rapid City home prices down 20 times faster in the next two years than we saw in the past two years, may get a taste of how Linus feels each Thanksgiving.  Put another way,  I sure feel it is a safe bet that interest rates will increase more in the next two years than local home prices will decrease, (i.e., I believe the interest rate penalty for waiting could far overshadow any plausible reward for waiting on price-declines.). 

Even worse.  What if this waiting game results inus buying our dream home next yearafter interest rates have gone back up to year-ago levels and local home priceshave gone up 5%.  That could result in finding our outstanding dream home out standing in a field of dreams.

If you have questions about any of this information give me a call.  And if you just enjoy watching an old computing engineer diving in the data dumpster, send me your detailed market question. And if you are one of the many very kind real estate agents who have offered your many compliments and gratitude for sharing this, then please continue to mention Lee Alley Real Estate as the source, as you provide these market analyses to your clients and customers.

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How Far is Our Housing Market Down?
...Not Much!

We hear this question a LOT:  “How much have area home values fallen during the national housing crisis?”  And the answer is:  “Not much.”  Hardly any.  Yes, volume is down in some sectors.  But Rapid City area unemployment remains one of the best in the nation, so our Black Hills homeowners are not desparate.  They’re holding on to what they’ve got.

With as many as ¾ (yes, THREE FOURTHS!) of homeowners in places like Las Vegas, Miami, Phoenix deeply “under water,” their troubles are compounding upon other troubles.  Unemployment, foreclosures, business stagnation, mortgage lending freezing up…it all goes together and each compounds the other. 

But here in good old Rapid City and the Black Hills, we just keep right on ticking.  In fact, our own firm, The Real Estate Group, is setting new records for volume, thanks to the lowest mortgage rates in 40 years, one of the nation’s lowest unemployment rates, and only two months or so on average for mainstream homes to sell. 

So, rather than ask “How much have house prices declined,” a much smarter question is: “With loan rates super low, how much less will it take to buy my dream home?”  There’s sure a lot of them out there to choose from.  We have one of the largest inventories on hand for any October in recent years.

Still not sure?  Call me directly on my cell phone any time:  605.863.0806.  --- Lee Alley

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1120 Racine St. Rapid City, SD 57701 Home | Photos | Photo Tour | Brochure Documents More Info | Contact Call Now on: 605 863 0806 Request More Info Request Showing Send To A Friend Loan Calculator Map View Aerial View Local Schools Print Brochure Census Data Dream Home Help Home Valuation Contact Nicely updated home with one level living is close to shopping, restaurants and much more. Property Highlights One level living Fenced back yard Mud room off garage/shop Upgraded furnace and hot water heater Attached oversized single car garage CLOSE TO SCHOOLS ! Laundry area off of kitchen CLOSE to (almost) EVERYTHING Mild-traffic street Property Description This three bedroom, one bath home is ideal for those just starting out or for those who are looking for a smaller, simpler home to downsize. The home is conveniently located CLOSE TO PHARMACY, BANKING, INDOOR SWIM CENTER, and to many of Rapid City's attractions. For Sale $104,900 MLS#: 99841 Bedrooms: 3 Bathrooms: 1 Square Feet: 912 Lot Size: .15 acres School District: Rapid City Master Bedroom: 11' x 11' Bedroom 2: 9' x 8' Bedroom 3: 12' x 8' Garage: Single Car Yard: Fenced Basement: No Crawl Space Lee Alley 605 863 0806 Broker Associate Contact 1120 Racine St., Rapid City, SD 57701 ©Lee Alley , Broker Associate The Real Estate Group 605 863 0806 Search More Real Estate - Click Here! Home All Photos Photo Tour Print Brochure Request Info Contact All information in this site is deemed reliable but is not guaranteed and is subject to change. Equal Housing Opportunity Real Estate Marketing and Property Flyer by SPS ©2005-2009 Single Property Sites Inc. SPS™ and pro-SPS™

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13722 Sunny Ridge Hermosa, SD 57744 Exceptional Home Sitting on 40 acres in the Black Hills Home | Photos | Photo Tour | Brochure Documents More Info | Contact Call Now on: 605 863 0806 Request More Info Request Showing Send To A Friend Loan Calculator Map View Aerial View Local Schools Print Brochure Census Data Dream Home Help Home Valuation Contact Don't forget to watch the walk-though video above! Nestled in the Black Hills of South Dakota, this exceptional home with a window-walled cathedral ceiling looks out from an enormous great room on to its own private 40 acres and distant views. With low-maintenance natural landscaping and views of the Black Hills from the covered front porch and 430 sq ft back deck. Built in 2006, the over 2,800 total sq ft custom home features an open floor plan with 3 bedrooms and 2 baths on a full unfinished basement. Directions: 4 Miles west of Hwy 79 on Hwy 36.North on Ghost Canyon 3 miles, right on Turkey Ridge for 1/4 mile, right on Sunny Ridge 1/4 mile through gate on left. Please click on the document tab to view a printable map of the location. Property Highlights 40 Acre Lot - No Covenants Views of the Black Hills with Incredible Wildlife 19’ Cathedral Ceiling Marvin Windows Ceramic Tile Floors Hi-Mac Counter Tops ~ Huge Island with Vegetable Sink Can-Exel Siding Walkout Basement is the Sheetrock/tape stage includes 2 bdrms, office, family rm w/ wet bar, & Bath Low-maintenance Natural Landscaping 430 sq ft Trex Deck Three-sided Propane Fireplace Six Panel Oak Doors and Oak Trim Hickory Cabinets with Pull-out Shelves, Spice Drawer, & Two Lazy Susans 3-car Garage with 2 Garage Doors - Heated Installation in all interior walls and main level floor Property Description The large foyer provides dramatic entrance into the living room, which features 19’ cathedral ceilings, a three-sided fireplace, and arched windows on the 2nd story for lots of natural light. The master suite is located on the main floor just off the living room, the opposite end of the home from the kitchen/dining areas. The master bedroom features a private sliding glass door to the back deck. The master bath features his/her vanities, a large shower, ceramic tile floors, and a walk-in closet. The custom kitchen features beautiful cabinets with pull-out shelves, spice drawer, and two lazy susans. The center island has a built-in counter sink, and the over-sized pantry has plenty of storage space. The 3 car garage with 2 separate garage doors has an entry into the kitchen. The full, unfinished daylight basement has rooms already framed, sheet rocked, and is plumbed for a bar and bathroom. The sliding door opens to the backyard and patio covered by the deck above. Once the remodeling of the lower level with sliding glass door, bar, and three bedrooms is completed, this spectacular 5-bedroom, 3-bath home with multiple privacy areas will be upscale among the Black Hills’ most elegant homes. *Buyer and Buyer Agent Responsible for confirming ALL measurements Don't miss out on this great opportunity to own a luxury home in the Black Hills!! For Sale $499,000 MLS#: 99832 Bedrooms: 3 Bathrooms (Full): 2 Bathrooms (Half): 0 Square Feet: 2806 Lot Size: 40 acres Year Built: 2006 School District: Hermosa Finished Sq Ft (From County): 1592 Total Sq Ft: 2806 Living Room: 15 x 20 Dining Room: 13 x 11 Kitchen: 22 x 17 Master Bed: 12 x 15 2nd Bed: 13 x 14 3rd Bed: 12 x 13 Garage: 31 x 23 Foyer: 7 x 9 Master Bath: 14 x 11 Upper Bath: 8 x 5 Front Deck: 20 x 6 Rear Deck: 50 x 10 Unfinished Sq Ft: 1214 Lee Alley 605 863 0806 Broker Associate Contact 13722 Sunny Ridge, Hermosa, SD 57744 ©Lee Alley , Broker Associate The Real Estate Group 605 863 0806 Search More Real Estate - Click Here! Home All Photos Photo Tour Print Brochure Request Info Contact All information in this site is deemed reliable but is not guaranteed and is subject to change. Equal Housing Opportunity Real Estate Marketing and Property Flyer by SPS ©2005-2009 Single Property Sites Inc. SPS™ and pro-SPS™

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22749 Pickarts Lane Box Elder, SD 57719 This Three Bedroom, 2 Bath home is a bright gem! Home | Photos | Photo Tour | Brochure Documents More Info | Contact Call Now on: 605 863 0806 Request More Info Request Showing Send To A Friend Loan Calculator Map View Aerial View Local Schools Print Brochure Census Data Dream Home Help Home Valuation Contact This home is a bright gem! A large three bedroom, two bath home nestled on a huge .79 acre lot in a quiet neighborhood. This home is minutes away fromboth Ellsworth Air Force Base and downtown Rapid City. PRICED AT APPRAISAL! (See Appraisal Under Documents Tab) Property Highlights .79 Acre Lot in a Quiet Neighborhood Cathedral Vaulted Ceilings Brushed Nickel Accents Window Seats Through-out Under Cabinet Lighting Upgraded Front Entry Doors Extra-efficient Heat Pump RV Parking Minutes Away from Downtown Rapid City & Ellsworth AFB Open Floor Plan Custom Bali Blinds Subway Tile on Kitchen Counter-backs Oak Trim & Cabinets Separate Heat Metering Six-Zoned RAINBIRD Automated Sprinkler System Property Description The home’s interior features vaulted ceilings in the kitchen, dining room and living room, open floorplan, brushed nickel accents, water softener, custom Bali blinds, window seats in living room and two bedrooms, subway tile on kitchen counter-backs, undercabinet lighting, oak trim and cabinets, upgraded front entry doors, and so much more you must come and see! The unfinished basement is insulated,plumbed and ready to be finished with 4th & 5th bedrooms, family room or office and a 3rd bathroom! The exterior includes separate electric heat meter(about 50% lower utility rate), extra-efficient heat pump, 12-zone RainBird automated sprinkler system currently set up on 4 zones, extra-large paved RV parking, maintenance-free lapsiding with brick accents, established bushes and trees, large fenced back yard. Seller offers to include a truckload of screened top soil for re-seeding area of dog run. For Sale $190,000 MLS#: 100335 Bedrooms: 3 Bathrooms: 2 Square Feet: 1787 Lot Size: .79 acres Year Built: 2006 School District: Douglas Living Room Size: 17x19 Dining Room Size: 11x10 Kitchen Size: 10x12 Master Bedroom Size: 12x15 2nd Bedroom Size: 10x10 3rd Bedroom Size: 10x11 Total Finished Sq Ft: 1247 Total Square Feet: 1787 Basement: READY TO BE FINISHED! Garage: 2 Car Sprinkler System: Six Zoned RainBird Automated Taxes (2009): $2,723.86 Lee Alley 605 863 0806 Broker Associate Contact 22749 Pickarts Lane, Box Elder, SD 57719 ©Lee Alley , Broker Associate The Real Estate Group 605 863 0806 Search More Real Estate - Click Here! Home All Photos Photo Tour Print Brochure Request Info Contact All information in this site is deemed reliable but is not guaranteed and is subject to change. Equal Housing Opportunity Real Estate Marketing and Property Flyer by SPS ©2005-2009 Single Property Sites Inc. SPS™ and pro-SPS™

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23156 153rd Ave Rapid City, SD 57703 Great views from 40 acres close to town. Home | Photos | Photo Tour | Brochure Documents Links More Info | Contact Call Now on: 605 863 0806 Request More Info Request Showing Send To A Friend Loan Calculator Map View Aerial View Local Schools Related Links Print Brochure Census Data Dream Home Help Home Valuation Contact Awesome panoramic views from 40 acre horse property. Property Highlights Beautiful View of the Black Hills Spacious Kitchen Central Air Sitting on 40 acres Heated Well House Gardening Beds Lots of packing space 16 x 16 open living room Wood Burning Stove Located close to Rapid City Fenced in area Horse/Hay Barn Three Walk-In Closets Vaulted Ceilings Property Description Awesome panoramic views from 40 acre horse property. Offers both peaceful seclusion and only a few minutes' to central Rapid City. Large 32' x 56' horse/hay barn. Has enjoyed huge property tax reduction with ag exemption from hay sold. School bus stop very close. See permanent foundation certification in Associated Documents. Also includes two outbuildings, heated "well house" and large garden in addition to barn. This property is at the end of a very low-use country road, but has a small few neighbors near enough to call 'neighbors'. Has good phone line and cell service. *Buyer and Buyer Agent Responsible for confirming ALL measurements For Sale $195,000 MLS#: 99842 Bedrooms: 3 Bathrooms (Full): 2 Bathrooms (Half): 0 Square Feet: 1768 Lot Size: 40 acres Year Built: 1991 School District: Rapid City Hay/Horse Barn: 32' x 56' Lee Alley 605 863 0806 Broker Associate Contact 23156 153rd Ave, Rapid City, SD 57703 ©Lee Alley , Broker Associate The Real Estate Group 605 863 0806 Search More Real Estate - Click Here! Home All Photos Photo Tour Print Brochure Request Info Contact All information in this site is deemed reliable but is not guaranteed and is subject to change. Equal Housing Opportunity Real Estate Marketing and Property Flyer by SPS ©2005-2009 Single Property Sites Inc. SPS™ and pro-SPS™

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TBD Highway 79 Hot Springs, SD 57747 An Exceptional 132 Acre Lot with Well, Located in the Black Hills Home | Photos | Photo Tour | Brochure Documents Links More Info | Contact Call Now on: 605 863 0806 Request More Info Request Showing Send To A Friend Loan Calculator Map View Aerial View Local Schools Related Links Print Brochure Census Data Dream Home Help Home Valuation Contact This exceptional acreage is located along Highway 79, just 4.2 miles north of Maverick Junction (Hwy 18/385). See the expansive open spaces for miles to the east while standing on any of the higher points of this property. There are no known covenants on this land. To the north it borders SD Game Fish & Park land. Owner's Remarks: The owner reports her horses have loved this property with its abundant grass and varied terrain. The owner indicates this property has supported 12 horses during the winter without supplemental hay, and that the land has never been over grazed. Legal Description: (70 ACRE+/- LOT) NE1/4NE1/4, N1/2S1/2SE1/4NE1/4, N1/2SE1/4NE1/4, SEC 11 TWP 7 RG 6 (62.19 ACRE+/- LOT) N1/2S1/2S1/2NW1/4, N1/2S1/2S1/2NW1/4, PT OF SW1/4NE1/4 LESS S1/2S1/2SW1/4NE1/4, ALL W OF HWY 79 SEC 12 TWP 7 RG 6 For Sale $425,000 MLS#: 99839 Lot Size: 132 acres School District: Hot Springs Well Info: See Documents Tab Grass: Natural Prairie Grass Location Maps: See Documents Tab Lee Alley 605 863 0806 Broker Associate Contact TBD Highway 79, Hot Springs, SD 57747 ©Lee Alley , Broker Associate The Real Estate Group 605 863 0806 Search More Real Estate - Click Here! Home All Photos Photo Tour Print Brochure Request Info Contact All information in this site is deemed reliable but is not guaranteed and is subject to change. Equal Housing Opportunity Real Estate Marketing and Property Flyer by SPS ©2005-2009 Single Property Sites Inc. SPS™ and pro-SPS™

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