Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Yup, we saw the same news story today. They attributed it to the fact that they work hard at bringing employment into the state, our crime rate is low, and houses are still more affordable then in most of the country. It's nice to be first in something good.
That's great! But the flip side of the coin is, is it new homes? Older homes? If it's older homes, where's the people that used to live there? Are the numbers good because a lot of people have left the state so homes were available? I hate articles like that because they never devulge the bottom line.
It like "This car dealer had the best sales record for the year out of all the dealers." The fact that it was a going out of business sale and he had to sell all of his stock due to bankruptcy, they don't tell you that part.
I hope it's in new home sales. Either current residents upgrading to new homes and selling their old one, or just plain new home sales.
I have read the article in the Argus Leader recently and have heard about the housing situation on the Sioux Falls networks. The housing is stable in the Sioux Falls and has not seen the wild increases in values when compared to the likes of other parts of the country (Las Vegas, Florida, California, etc.). The lending in this part of the country is more sensible and conservative than in other parts of the US. Therefore, there has not been near the subprime loans in South Dakota and the inflated prices as in other areas. With the Rapid and Sioux Falls areas growing along with some other areas, South Dakota is holding its own at this current time.
I'd be willing to bet that there are several factors in play here. One is educational levels. Those who signed up for the Adjustable Rate Mortgages (ARMs), and mortgages that were at 25% or higher, usually did not/could not read the contracts, could not qualify for the 15 year or 30 year fixed rate low interest mortgages because of their inability to continue on an upwardly mobile path of credit provision/payment, and believed everything the predatory lenders told them. I would be willing to bet that moral values such as responsibility and integrity have a lot to do with this as well. I'm willing to even bet that there are very few people in the Midwest who have the 'entitlement' mindset - the whole "I deserve a house!" or "I deserve a HELOC so I can have a nice car and take expensive vacations too!" attitude would be foreign to them.
SC, I think you hit the nail on the head. Not many of us feel entitled like some people do. Guess it goes back to what we were told as children, " If you can't pay for it, leave your hands off."
It just blows me away when I read about some of the things people have bought and are on the verge of losing and they don't understand why. HUGE houses with a pool and jacuzzi, etc. It's just things that most of us can't afford.
Can't put all the blame on the people buying homes. Some yes, but not all. I'll give you a for instance.
2 years ago, my daughter and her husband decided to purchase a home. They went to the bank and did all the paperwork and pre-qualified for $190,000. They started looking. They took their time and looked for about 3 months. They had 4 children. What they were finding is that houses in their price range weren't going to be big enough to be comfortable. They was going to have to Squeeze into something and make do. But driving down the street one day they come across a house with a for sale sign. One they hadn't looked at. The realitor happened to be there, showing it to another couple. They looked at it and it was perfect. Exactly what they wanted. It was $197,000. and the owner wouldn't budge. Next time they was at the bank they happened to run into their loan officer. He asked them if they'd found anything yet. They explained about the house they found but it was above what they pre-qualed for. Loan officer said, "Come with me". He explained that he had more breathing room if they'd go with a Adjustable rate morgage and that he could go the full amount. The payment would only be about $40 more a month. They took it.
But they were smart and stayed ahead of the game. They made payments for 6 months until they got their pickup paid off. Then they went down and refinanced with a fixed rate morgage. Now they have no problems making the morgage payment. But they did that before the interest rates went up over a year ago. So they stayed ahead of the game.
But, when you think about it. Who's to fault if they failed. They are. But in reality, they were talked into it by the bank.
That's a good example. At the end of this latest housing boom, the lenders had literally run out of people who were qualified to whom they could lend money. Their solution was to lower the standards that a borrower needed to meet to qualify, depsite the fact that the previous standards were set as a result the experiences of previous housing busts. So, out the window went the 20% down payment, rigorous income verification, excellent payment histories, high credit (FICO) scores, etc., qualifications that were proven to minimize defaults on mortgages. The result is hardly a big suprise, in many parts of the country people are walking away from their homes because they have negative equity (they owe more than the house is worth) and no chance to pay their mortgages anyway. I hate to say it but many of these people are better off without the enormous financial obligations they entered into, often due to negligence on the part of the lender who should have known better.
Is it the borrowers' fault? Yes. Does the lending industry have to accept a good deal of the blame and institute reforms? Yes.
South Dakota seems to be the prime example of positive growth and responsible housing investments. People here do not try to outdo one another by investing in the greatest home only to have the bank take it away.
South Dakota seems to be the prime example of positive growth and responsible housing investments. People here do not try to outdo one another by investing in the greatest home only to have the bank take it away.
Overall, we're level-headed people.
Danny, you brought up a very good point. This is just a thought. But in the big city's, you go to a morgage broker or somebody that specializes in home loans and will get you into a home, no matter what it takes.
In South Dakota, you go to the only bank in town. Run by a local man and his family. There's a loan board that sets down and reviews your application. They take a look at the years that you've had an account with them, how you've handled it. They check your savings and look at how you've managed that. They know you. Or at least, they know something about you. And they're honest in their appraisal of what you can, and can't do. They tell you straight up. They're not after that almighty commission, they're after keeping you as a customer til they die, or you do.
Think that might have something to do with it?
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Nationwide Housing Mess
