April 12, 2021

The Sioux Falls housing market saw inventory plunge again in March as home sales also fell.

The inventory dropped 59 percent year-over-year to a 1.7-month supply. That’s slightly better than February’s 1.4-month supply, according to the Realtor Association of the Sioux Empire.

The city saw 271 closed sales for the month, a 15 percent drop from the same time last year.

New listings also were down more than 15 percent, totaling 494 homes.

“Normal spring increases in sales activity, coupled with relaxing COVID-19 policies, created a very busy March real estate market as buyer demand continued largely unabated in the face of rising home prices and mortgage rates,” according to an analysis included with the report.

“Existing home seller and new construction activity continue to remain below levels necessary to bring the market back into balance, pointing to a busy and competitive buyer market in the coming months.”

The average seller also received slightly more than list price at 100.4 percent, compared with 99.2 percent a year ago.

The average price of a house sold in March was $274,806, up 9.6 percent year-over-year.

“March sales activity picked up where February left off, with an already red-hot market showing no signs of slowing,” the report said.

“Rising home prices and mortgage rates are affecting affordability but have yet to impact demand, as sales continue to increase. Extremely constrained supply in many market segments will continue to fuel multiple offers and rising home prices.”

For the 12-month period spanning April 2020 through March 2021, pending sales in the Sioux Falls region were up 21.3 percent overall. The price range with the largest gain in sales was the $600,000 to $700,000 range, where they increased 93.6 percent.

“While many homebuilders are working to increase their activity, the cost of lumber and other materials and a backlogged supply chain continue to limit new home construction and have increased costs substantially,” the report said.

In Sioux Falls, new residential construction also is solidly ahead of last year, totaling $61.7 million for the first quarter, compared with $38.2 million.

That represents 187 new single-family homes, compared with 109 for the same time last year and 74 for the same time in 2019.

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