Monthly Market Indicators
Housing markets across the nation are most assuredly active this summer, and buyer competition is manifesting itself into several quick sales above asking price. While the strength of the U.S. economy has helped purchase offers pile up, the Fed recently increased the federal funds rate by 0.25 percent, marking the second rate hike this year and seventh since late 2015. Although the 30-year mortgage rate did not increase, buyers often react by locking in at the current rate ahead of assumed higher rates later. When this happens, accelerated price increases are possible, causing further strain on affordability.
New Listings in Sioux Falls decreased 9.9 percent to 474. Closed Sales were down 4.2 percent to 386. Inventory levels fell 23.5 percent to 936 units.
Prices continued to gain traction. The Median Sales Price increased 2.8 percent to $219,900. Days on Market was down 8.9 percent to 74 days. Sellers were encouraged as Months’ Supply of Homes for Sale was down 29.1 percent to 3.1 months.
Inventory may be persistently lower in year-over-year comparisons, and home prices are still more likely to rise than not, but sales and new listings may finish the summer on the upswing. The housing supply outlook in several markets is beginning to show an increase in new construction and a move by builders away from overstocked rental units to new developments for sale. These are encouraging signs in an already healthy marketplace.
Housing Supply Overview
We are firmly within summer during an economically strong year in the U.S., thus real estate activity is busy. There are still generally more buyers than sellers in most price and housing style categories, so prices will continue to rise until that situation changes. For the 12-month period spanning July 2017 through June 2018, Closed Sales in Sioux Falls were up 0.4 percent overall.
The overall Median Sales Price was up 5.8 percent to $210,000.
Market-wide, inventory levels were down 20.1 percent. The construction type that lost the least inventory was the Previously Owned segment, where it decreased 17.3 percent. That amounts to 3.4 months’ supply for Single-Family homes and 3.5 months’ supply for Condos.