Homes sales are down, inventory up in Sioux Falls

Feb. 6, 2023

Home sales dropped, but inventory showed a little surge in Sioux Falls to start the year.

Through January, closed sales fell 33.5 percent compared with the start of 2022.

New listings increased 12 percent, according to the Realtor Association of the Sioux Empire Inc.

It left the market with a 2.3-month supply of homes, which represents a nearly 21 percent increase compared with the same time last year.

“Demand for housing persists, but higher mortgage interest rates have cut into housing affordability, with total home sales down 17.8 percent (nationally) last year compared to 2021,” according to an analysis included with the report.

The average price of a home sold in Sioux Falls in January was $343,613, up 4.3 percent from last year, while the median price rose 0.8 percent to $286,000.

The average house spent 77 days on the market before selling, which is more than a week faster than last year’s 85 days.

“Seller concessions have made a comeback, giving buyers more time and negotiating power when shopping for a home,” the report said. “Although home prices remain high, mortgage rates declined steadily throughout January, falling to their lowest level since September, sparking a recent surge in mortgage demand. Lower rates should aid in affordability and may soon lead to an uptick in market activity ahead of the spring selling season.”

In Sioux Falls, sellers received an average of 99 percent of original list price, a drop of 1.5 percentage points.

For the first time in a year, homebuilder confidence has increased, rising 4 points to 35 in January, according to the National Association of Home Builders/Wells Fargo Housing Market Index.

“Elevated sales prices, coupled with a surge in mortgage rates, caused demand for new homes to plummet in 2022, with builder sentiment declining throughout the year.,” the RASE report said. “The recent rise in builder optimism may be due in part to new-home sales, which increased 2.3 percent month to month as of last measure, according to the U.S.

Census Bureau.”

For the 12-month period spanning February 2022 through January 2023, pending sales in the Sioux Falls metro area were down 15 percent overall.

The price range with the largest gain in sales was $800,000 to $900,000, where they increased 85.7 percent.