April 7, 2022

Sioux Falls’ inventory of homes is about half of what it was last spring — when it already was low.

The city had a 1.4-month supply as of March, according to the Realtor Association of the Sioux Empire Inc., representing 461 homes on the market, compared with 850 for the same time last year.

Prices also showed a surge, with the average for a house sold in March at $333,320, a 19.1 percent year-over-year increase.

The median price, $275,000, was up 10 percent.

It’s a similar story nationally, according to the report.

“Existing home sales recently dropped to a six-month low, falling 7.2 percent as buyers struggled to find a home amid rising prices and historic low inventory,” it said.

Pending sales are also down, declining 4.1 percent as of last measure, according to the National Association of Realtors.

“Builders are working hard to ramp up production — the U.S. Census Bureau reports housing starts are up 22.3 percent compared to a year ago — but higher construction costs and increasing sales prices continue to hamper new home sales, despite high demand for additional supply,” it said.

New listings in Sioux Falls dropped 22.7 percent, totaling 320 homes, while closed sales fell 14.1 percent.

The average house spent 74 days on the market before selling, which is six days fewer than the same time last year.

And sellers received 102 percent of original list price on average, indicating multiple-offer situations are still common.

For the 12-month period spanning April 2021 through March 2022, pending sales in the Sioux Falls region were up 2.3 percent overall. The price range with the largest gain in sales was $700,000 to $800,000, where they increased 208 percent.

“Across the country, consumers are feeling the bite of inflation and surging mortgage interest rates, which recently hit 4.6 percent in March, according to Freddie Mac, rising 1.4 percent since January and the highest rate in more than three years,” the report said.

“Monthly payments have increased significantly compared to this time last year, and as housing affordability declines, an increasing number of would-be homebuyers are turning to the rental market, only to face similar challenges as rental prices skyrocket and vacancy rates remain at a near-record low.”

Millennials also are entering the housing market at a record pace, the report continued, “fueling demand and driving sales prices higher amid an epic housing shortage.”

Currently, millennials represent 22 percent of the U.S. population but make up 43 percent of the current market share, according to a survey by the National Association of Realtors.

“With nearly a quarter of the population approaching their peak earning years over the next two decades, this new generation of homebuyers are expected to have a big impact on the economy — and on the housing market — in the years to come.”