Oct. 7, 2022

Closed home sales in the city of Sioux Falls took a steep drop in September — as the average price of a house sold hit an all-time high.

There were 269 closed sales reported for the month, according to the Realtor Association of the Sioux Empire Inc.

That represents a 24 percent year-over-year drop. When combined with a 5.4 percent drop in new listings, it left the market with a 2.3-month supply of available homes.

The average price of a house sold in the city in September reached $371,027 — up 16.7 percent over the same time last year. The median sales price, $315,000, is up 14.4 percent.

“The U.S. real estate market continues to slow as we move into fall as rising consumer prices and higher mortgage interest rates squeeze homebuyer budgets and cool activity,” according to an analysis included with the report.

“Affordability challenges have priced many buyers out of the market this year, and buyers who do succeed in purchasing a home are finding that the costs of homeownership have increased significantly, with monthly mortgage payments more than 55 percent higher than a year ago, according to the National Association of Realtors. Inventory remains lower than normal, and as the market continue to shift, experts project homes will begin to spend more days on market and price growth will slow in the months ahead.”

The average house in Sioux Falls spent 64 days on the market before selling in September, two days fewer than the same time last year. Sellers on average are still receiving 100.9 percent of original listing price, though that’s down half a percentage point year-over-year.

“The cost of borrowing has reached multiyear highs on everything from credit cards to auto loans in 2022 as mortgage interest rates topped 6 percent for the first time since 2008, causing existing home sales to decline for the seventh consecutive month,” the report said.

In the Sioux Falls area, the construction type with the largest price gain was new construction, with prices increasing 24.8 percent to average $343,122. The price range selling the fastest is $150,000 to $200,000, while the homes selling the slowest are priced at $1 million or more.

Builder confidence declined for the ninth consecutive month in September as high home prices, rising interest rates and elevated building costs continue to impact affordability, reducing buyer traffic and hindering new home sales, according to the National Association of Home Builders and Wells Fargo Housing Market Index.