Monthly real estate report includes signs market ‘may be cooling’
June 9, 2022
Home inventory in Sioux Falls isn’t budging.
It fell again in May to a 1.6-month supply, a 49.5 percent drop compared with the same time last year, according to the Realtor Association of the Sioux Empire.
It was a combination of declining new listings, which fell 17.1 percent, and an increase in pending sales, which were up 38.6 percent. Closed sales dropped 13.4 percent.
The median sales price surged to $325,111, up 22.7 percent from the same time last year. The average sales price rose 15.7 percent to $352,183.
“After two years of record-setting activity, there are signs the housing market might be cooling. High home prices and a surge in mortgage interest rates are slowing buyer activity, with home sales declining for the third consecutive month under the weight of soaring homeownership costs,” according to an analysis included with the report.
“The National Association of Realtors reports existing home sales were down 2.4 percent from the previous month, while pending sales fell 3.9 percent as of last measure, extending the trend of recent months. Economists predict sales will continue to soften in the near future, which may put downward pressure on home prices.”
Buyers appear to be competing in Sioux Falls for what homes are available, though. Sellers received 104.5 percent of their original list price in May, and the average home took 62 days to sell, which is nine fewer than the same time last year.
The price range with the largest gain in sales continues to be $700,000 to $800,000, where they’re up 159.4 percent.
Sioux Falls isn’t necessarily building more houses to keep up with the demand yet. The city reported 412 new single- family home permits through May — the exact same as 2021.
“A spike in mortgage rates, increased building costs and record-setting new home prices continue to take their toll on the construction industry as new single-family home sales plunged 16.6 percent month over month, according to recent data from the Commerce Department,” the RASE report said.
“With the median price of a newly built home a record $450,600 as of last measure, declining affordability continues to hamper demand as mortgage applications for new home purchases fell 10.6 percent compared to a year ago, according to the Mortgage Bankers Association Builder Application Survey.”
