Aug. 4, 2022

Home sales in Sioux Falls dropped 27.6 percent year over year in July, signaling a bit of what is being experienced nationwide.

Inventory is at a two-month supply, slightly better than June’s 1.8-month supply, but 37.4 percent less than the same time a year ago, according to the Realtor Association of the Sioux Empire Inc.

“The U.S. housing market has continued to cool as rising mortgage rates and record-high sales prices have stifled affordability, weakening demand and pricing out a multitude of buyers,” according to an analysis provided with the report.

“Nationally, median household income has failed to keep pace with increasing mortgage payments.”

The cost of buying a home is 80 percent more than it was three summers ago, according to the National Association of Realtors.

“As more and more prospective buyers find their home purchase plans delayed, many are turning to the rental market, where competition has intensified due to increased demand,” it said.

New listings in Sioux Falls dropped 16.3 percent in July.

The average house spent 65 days on the market before selling, which is one day less than last year. On average, sellers received 103.4 percent of their original list price.

While sales prices are still posting double-digit year-over-year increases, there was some moderation in July. The average price of a home sold for the month was $361,828, which is 16.5 percent more than a year ago, but less than June’s average price of $368,561. The median price in July was $310,000, a 14 percent increase from the same time in 2021, but less than June’s $326,000.

“At a time of year when homebuying activity is typically very strong, soaring homeownership costs have caused home sales to decline nationwide for the fifth consecutive month,” the report said.

“New-home production is slowing as soaring costs and declining housing affordability have caused builder confidence to plummet to its lowest level since April 2020.”

For the 12-month period spanning August 2021 through July 2022, pending sales in the Sioux Falls metro area were up 1.3 percent overall. The price range with the largest gain in sales was the $900,000 to $1 million range, where they increased 92.3 percent.