Monthly Market Indicators
Despite a strong U.S. economy, historically low unemployment and steady wage growth, home sales began to slow across the nation late last year. Blame was given to a combination of high prices and a steady stream of interest rate hikes by the Federal Reserve. This month, the Fed responded to the growing affordability conundrum. In a move described as a patient approach to further rate changes, the Fed did not increase rates during January 2019.
New Listings in Sioux Falls decreased 10.2 percent to 281. Closed Sales were down 7.5 percent to 135. Inventory levels fell 19.4 percent to 735 units.
Prices continued to gain traction. The Median Sales Price increased 9.6 percent to $212,500. Days on Market was down 14.1 percent to 89 days. Sellers were encouraged as Months Supply of Homes for Sale was down 21.7 percent to 2.5 months.
While the home affordability topic will continue to set the tone for the 2019 housing market, early signs point to an improving inventory situation, including in several markets that are beginning to show regular year-over-year percentage increases. As motivated sellers attempt to get a jump on annual goals, many new listings enter the market immediately after the turn of a calendar year. If home price appreciation falls more in line with wage growth, and rates can hold firm, consumer confidence and affordability are likely to improve.
Housing Supply Overview
Inventory is gradually starting to improve in many pockets across the country, including in several markets that are showing year-over-year percentage increases. Listings tend to improve immediately after a new year, but this national increase also has to do with fewer sales. For the 12-month period spanning February 2018 through January 2019, Closed Sales in Sioux Falls were down 7.5 percent overall.
The overall Median Sales Price was up 9.6 percent to $212,500.
Market-wide, inventory levels were down 14.8 percent. The construction type that lost the least inventory was the Previously Owned segment, where it decreased 14.6 percent. That amounts to 2.6 months supply for Single-Family homes and 3.8 months supply for Condos.
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