September Housing Market

Months of rising home prices might be starting to cause a shift in the market.

Closed home sales dropped 17 percent year-over-year in Sioux Falls last month, according to a report from the Realtors Association of the Sioux Empire. There were 332 closings compared with 400 in September 2020.

The average price of a home sold was $317,345, a 14.7 percent year-over-year increase.

The median price was $270,500, an 11.5 percent increase.

“Declining affordability has had a significant impact on homebuyers, many of whom have been priced out of the market and are choosing to wait for sales prices to ease before resuming their home search,” according to an analysis included with the report.

New listings dropped 5.4 percent.

That left the market with a 2.1-month supply of inventory, slightly more than at other times this year but still 40 percent lower than a year ago.

“There are signs the market may be shifting, however. New listings have continued to hit the market, bucking seasonality trends commonly seen in the fall, a time when listing and sales activity typically slows as children return to school,” the report said.

“As inventory increases, competition for homes may soften and could even bring a moderation in sales prices, which after 114 months of year-over-year gains would be music to the ears of homebuyers throughout the country.”

In September, the average house spent 65 days on the market in Sioux Falls before selling, which is a week faster than last year.

Sellers received an average of 101.6 percent of original list price, indicating multiple offers continue.

According to the National Association of Realtors, the number of first-time homebuyers declined to 29 percent, the lowest level in years “as bidding wars, competition from cash buyers and a lack of affordable housing have caused some buyers to put their home plans temporarily on hold,” the report said.

“With sales prices posting double-digit increases year over year, some first-time buyers have found they may lack the financial resources to buy a home and have decided to wait for a change in their personal or economic conditions before continuing their home search.”

Original article from Sioux Falls,Business

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