Jan. 8, 2024

Sioux Falls ended 2023 with an almost 11 percent increase in home inventory for sale as new listings rose and sales dropped.

December’s inventory reached 771 homes, up 10.8 percent from the same time a year ago. The market had a 3.4-month supply of available homes, up 22 percent on a year-over-year basis, according to the Realtor Association of the Sioux Empire.

That’s in part because new listings surged 18.3 percent compared with a year ago, while closed sales dropped 8 percent.

“Low levels of inventory continue to impact U.S. home sales, offering few options for aspiring buyers to choose from,” according to an analysis included with the report.

“Homebuyer demand is picking up, and without a significant increase in supply, experts believe home prices will likely remain elevated for some time to come.”

The average price of a home sold in Sioux Falls was $382,357, up 10.9 percent from December 2022. The median price was up 3.4 percent at $305,000.

Affordability challenges “continue to hinder prospective buyers,” the report said. “Most of this period’s closed sales went under contract in October, when mortgage rates were at a two-decade high. With rates having dropped more than a full percentage point since then, existing-home sales may continue to pick up in the months ahead.”

The average home spent 74 days on the market before selling in December, three more days than the same time in 2022. Sellers received 97.7 percent of their original list price, down from 98.4 percent a year ago.

Nationwide, sales of new residential homes sank 12.2 percent from the previous month to a seasonally adjusted annual rate of 590,000, the lowest level since November 2022, according to the U.S. Census Bureau, as decades-high mortgage rates continue to impact buyer affordability.

“The National Association of Home Builders cautioned the drop is only temporary, however, with sales of new homes expected to rise in the months ahead due to falling mortgage rates, which have retreated more than 1 full percentage point from their peak of 7.79 percent in October,” the report said.