Home sales continue to drop to start the year

Feb. 7, 2019

The drop in home sales experienced in Sioux Falls late last year seems to be persisting into 2019.

There was a 7.5 percent year-over-year drop in closed sales in January, according to the Realtor Association of the Sioux Empire.

New listings fell 10.2 percent, representing 261 homes that went on the market.

“Despite a strong U.S. economy, historically low unemployment and steady wage growth, home sales began to slow across the nation late last year. Blame was given to a combination of high prices and a steady stream of interest rate hikes by the Federal Reserve,” according to an analysis included with the report.

“This month, the Fed responded to the growing affordability conundrum. In a move described as a patient approach to further rate changes, the Fed did not increase rates during January 2019.”

Prices jumped in January. The average price of a home sold in Sioux Falls was $249,377 – an increase of 8.4 percent year-over-year.

The average house spent 89 days on the market before selling, which is about two weeks less than one year ago.

Inventory fell to a 2.5-month supply – a 21 percent drop from the start of 2018.

“While the home-affordability topic will continue to set the tone for the 2019 housing market, early signs point to an improving inventory situation, including in several markets that are beginning to show regular year-over-year percentage increases,” the report said.

“As motivated sellers attempt to get a jump on annual goals, many new listings enter the market immediately after the turn of a calendar year. If home-price appreciation falls more in line with wage growth, and rates can hold firm, consumer confidence and affordability are likely to improve.”

Ratchford: What is happening to our real estate market?

Home sales continue to drop to start the year

The drop in home sales experienced in Sioux Falls late last year seems to be persisting into 2019.

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