Aug. 7, 2023

Closed home sales and new listings both dropped last month in Sioux Falls in keeping with a nationwide trend.

In July, there were 260 home sales that closed in the city, down 14.2 percent from the same time last year, according to the Realtor Association of the Sioux Empire Inc.

“Affordability constraints have continued to limit homebuying activity this summer, with existing-home sales falling 3.3 percent month over month nationwide as of last measure, according to the National Association of Realtors,” it said in an analysis included with the report.

“Mortgage rates have approached 7 percent in recent months, leading many prospective buyers to put their home purchase plans temporarily on hold. But higher rates have also kept many existing homeowners from listing their homes for fear of giving up the low-rate mortgages they locked in a few years ago when rates were significantly lower.”

Prices aren’t dropping, though. The average price of a house sold last month in Sioux Falls was $388,967, up 7.6 percent from last year, while the median price increased 7.3 percent to $332,648.

The category with the largest gain in sales was the $800,000 to $900,000 range, increasing 51.2 percent.

“Despite a drop in existing-home sales, home prices have remained near record highs, with a national median sales price of $410,200 as of last measure, 0.9 percent below the all-time high of $413,800 recorded in June 2022, according to NAR,” the report said.

“The lack of inventory has boosted competition among buyers and put upward pressure on sales prices, especially in more-affordable markets where competition for homes remains particularly strong.”

The average house in Sioux Falls spent 73 days on the market before selling, eight days more than last year.

Sellers are getting 99.9 percent of original list price, although that’s down from last year when they received an average of 103.4 percent.

The market had 785 homes available as of July, down 6.9 percent from last year, but because they’re taking longer to sell, the market is left with a 3.2-month supply, which is up from 2.9 months one year ago. The supply of new construction is higher at 3.6 months, and there’s a four-month supply of condos.