Monthly Market Indicators
The three most prominent national market trends for residential real estate are the ongoing lack of abundant inventory, the steadily upward movement of home prices and year-over-year declines in home sales. Sales declines are a natural result of there being fewer homes for sale, but higher prices often indicate higher demand leading to competitive bidding. Markets are poised for increased supply, so there is hope that more sellers will take advantage of what appears to be a ready and willing buyer base.
New Listings in Sioux Falls decreased 2.1 percent to 280. Closed Sales were down 7.6 percent to 145. Inventory levels fell 16.5 percent to 789 units.
Prices continued to gain traction. The Median Sales Price increased 9.4 percent to $200,000. Days on Market increased 5.0 percent to 105 days. Sellers were encouraged as Months Supply of Homes for Sale was down 22.5 percent to 2.7 months.
In February, prevailing mortgage rates continued to rise. This has a notable impact on housing affordability and can leave consumers choosing between higher payments or lower-priced homes. According to the Mortgage Bankers Association, the average rate for 30-year fixed-rate mortgages with a 20 percent down payment that qualify for backing by Fannie Mae and Freddie Mac rose to its highest level since January 2014. A 4.5 or 4.6 percent rate might not seem high to those with extensive real estate experience, but it is newly high for many potential first-time home buyers. Upward rate pressure is likely to continue as long as the economy fares well.
Housing Supply Overview
Mortgage rates are on the rise. When this happens, it means that buyers in the lower-priced categories tend to have the dilemma of choosing to pay more for their desired home, paying less to get less, waiting for more listings or saving more money toward a down payment. For the 12-month period spanning March 2017 through February 2018, Closed Sales in Sioux Falls were down 2.7 percent overall.
The overall Median Sales Price was up 7.2 percent to $199,900.
Market-wide, inventory levels were down 17.8 percent. The construction type that lost the least inventory was the New Construction segment, where it decreased 10.7 percent. That amounts to 2.7 months supply for Single-Family homes and 3.3 months supply for Condos.
– 10k Research & Marketing