Nov. 7, 2022

Sioux Falls home sales dropped more than 35 percent in October as sales price increases slowed.

There were 234 closed sales in the city for the month, which is 127 fewer than the same time last year, according to a report from the Realtor Association of the Sioux Empire.

New listings dropped 15.3 percent, representing 305 homes listed in October, compared with 360 last year.

“Stubbornly high inflation and soaring borrowing costs have eroded buyer purchasing power and have caused the market to cool rapidly this year,” according to an analysis included with the report.

“The U.S. housing market is undergoing a major shift, and affordability continues to be an obstacle for buyers and sellers. Mortgage rates have doubled since March, and home prices remain elevated due to a limited supply of homes, although price gains are slowing at a quickening pace. As a result, many homeowners are waiting until market conditions improve to sell their home, while other sellers are increasingly cutting prices and offering concessions to attract a greater number of buyers.”

While prices are still up year over year in Sioux Falls, it’s not by as much.

The average price of a home sold in October was $343,982, up 7.8 percent year over year, while the median price was $290,000, up 11 percent.

The average home spent 62 days on the market, which is a week less than last year, and sellers received on average 100.1 percent of their original list price.

The market ended the month with a 2.3-month supply of homes, down 21.2 percent.

With the last 12 months, the price range with the largest gain in the Sioux Falls area was homes at $800,000 to $900,000, where sales increased 81.5 percent.

Nationally and locally, construction of new homes is down compared with a year ago.

In Sioux Falls, building permits have been issued for 612 new homes through October, compared with 782 last year.

“Rising mortgage rates continue to hamper America’s homebuilders, as higher material costs and growing affordability challenges limit the number of people who can afford to purchase a new home, causing new-home sales to decline nationwide,” the report said.