Home sales drop sharply in December

Jan. 7, 2019

Home sales fell 31.5 percent in December in Sioux Falls compared with a year ago, according to the Realtor Association of the Sioux Empire.

That represents 176 homes sold, compared with 257 homes in December 2017.

It also caused the market to end the year essentially flat, with 3,410 homes sold – an increase of six homes year-over-year.

New listings dropped 10 percent in December year-over year. For the year, they were almost identical to 2017.

Prices continued to increase, but not as much as the overall year. The average price of a home sold in December was $237,868, which is 1.8 percent more than in 2017.

For the year, the average price was $239,677, an increase of 4.2 percent, and the median home price was $209,000, an increase of 6.1 percent.

“Home prices were consistently up again in most markets in 2018 but at reduced levels compared to recent years,” according to an analysis included with the report. “High demand for few homes for sale fueled price increases, but evidence is mounting that inventory will finally improve in 2019. This may apply some downward pressure on prices for beleaguered homebuyers.”

Nationwide, unemployment remained low again in 2018, and wages continued to improve, the report added. But people’s pay generally hasn’t increased at the same rate as home prices.

“It is generally good for all parties involved in real estate transactions when wages grow, but the percentage of increase on average has not kept pace with home price increases,” it said. “This created an affordability crux in the second half of 2018. Housing affordability will remain an important story line in 2019.”

The Sioux Falls market had a 2.6-month supply of homes in December, which is 14.8 percent less than a year ago.

“A fourth interest rate hike by the Federal Reserve in 2018 spooked the stock market to close out the year,” the report said. “The Fed has indicated that the number of rate increases in 2019 will be halved, which may be of little comfort to an already compressed consumer.”

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Home sales drop sharply in December

Home sales fell 31.5 percent in December in Sioux Falls compared with a year ago, according to the Realtor Association of the Sioux Empire.

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