April 9, 2018

The average price of a home sold in March in Sioux Falls was 6 percent more than the same time last year as buyers continue to face shrinking inventory.

The average house in the city sold for $232,326, or about $13,000 more than the same time last year.

The median price of a house jumped 10 percent to $209,000, according to the Realtor Association of the Sioux Empire.

Closed sales increased 4 percent.

“Some markets have had increases in signed contracts, but the vast majority of the nation continues to experience fewer closed sales and lower inventory compared to last year at this time,” according to an analysis included with the report. “Despite there being fewer homes for sale, buyer demand has remained strong enough to keep prices on the rise, which should continue for the foreseeable future.”

New listings in the city of Sioux Falls dropped 2.5 percent.

The average house spent 94 days on the market before selling, which is three days longer than the same time last year, and sold for 99 percent of the original list price.

“Supply remains low in most markets and categories. Buyer demand continues to show that there is room for growth, but we still have not reached a point where a year-over-year increase in the number of homes for sale can be anticipated,” the report said.

The Federal Reserve raised its key short-term interest rate by one-quarter of a percentage point in March, citing concerns about inflation. It is the sixth rate increase by the Fed since December 2015, and at least two more hikes are expected this year, according to the report.

“Borrowing money will be more expensive, particularly for home equity loans, credit cards and adjustable rate mortgages, but rising wages and a low national unemployment rate that has been at 4.1 percent for five months in a row would seem to indicate that we are prepared for this. And although mortgage rates have risen to their highest point in four years, they have been quite low for several years.”