Dec. 7, 2022

Home sales saw a major slowdown in November in Sioux Falls, down 44 percent year-over-year.

Last month, 181 homes were sold in the city, according to a report from the Realtor Association of the Sioux Empire, compared with 323 for the same month last year.

New listings increased 1.5 percent, leaving the market with a 2.3-month supply — slightly higher than much of this year but still down nearly 9 percent compared with last year.

“Housing affordability continues to be a major roadblock for market participants, with mortgage rates more than double compared to this time last year,” according to an analysis included with the report.

“Buyers are delaying home purchases in hopes rates will drop, while many sellers are holding off on listing their homes due to weakening buyer demand, unwilling to trade in their current lower rates for significantly higher borrowing costs on their next property. As a result, existing home and pending home sales have continued to slow as we move into winter.”

The average price of a home sold in Sioux Falls last month was $345,231, up 17.3 percent from last year. The median sales price was $295,000, a 13.5 percent increase.

On average, sellers received 99.5 percent of their original list price, down 1.2 percentage points.

The average home spent 64 days on the market before selling, which is eight days faster than a year ago.

For the 12-month period spanning December 2021 through November 2022, pending sales in the Sioux Falls region were down 8.7 percent overall. The price range with the largest gain in sales was $900,000 to $1 million, which increased 82.4 percent.

“Although buyers have more options to choose from, home prices remain high, and soaring borrowing costs have caused monthly payments to increase significantly, with the average homebuyer paying 77 percent more on their loan per month compared to the same period a year ago, according to Realtor.com,” the report said.

“Rising interest rates, elevated home prices and persistently high levels of inflation have caused housing affordability to plunge to its lowest level since 2012, according to the NAHB/Wells Fargo Opportunity Index.”

The National Association of Home Builders reports 42.2 percent of new and existing homes that sold in the third quarter were affordable to homebuyers earning the U.S. median income of $90,000, surpassing the previous low of 42.8 percent in the second quarter and causing builder confidence to weaken.