SIOUX FALLS, S.D. (KELO) –The spring real estate market is starting to pick up with pending sales up five and a half percent from last month, but closed sales were down more than 43 percent from last April.
“Definitely our closed sales are down,” Realtor Association of the Sioux Empire (RASE) President Tara Allen said.
But those sales are not just down from last year, it’s even down significantly since 2008, the nation’s latest housing recession and when RASE began collecting sales data.
“In 2008 we had 275 closed sales, now we’re at 156 closed sales,” Allen said.
Allen says the low number of sales in April isn’t a result of people no longer wanting to buy, but homeowners now choosing not to sell, largely because of rising interest rates.
“The people who maybe would have moved to get that extra bedroom, who are looking at the difference of if I sell my home to afford the next home and what I might get might not make sense so they’re deciding to stay put right now,” Allen said.
With still historically low inventory of homes for sale, you may see fewer for sale signs in yards this summer, but that’s just helping to increase the competition.
“The average sale price is going up, the value is still there, it’s just fewer people are moving,” Allen said.
The median sale price for Sioux Falls homes rose another 14.3 percent in April.
“We almost doubled our money with this one,” Sioux Falls homeowner Savannah Lucas said.
After seven years in her southwest Sioux Falls home, Savannah Lucas and her family put their home on the market last month.
“We put it on by a Saturday and it sold by a Monday, so very fast,” Lucas said.
She’s now moving into the home they custom built over the past two years, a dream come true even with today’s higher interest rates.
“The interest rate was definitely higher than what we would like, but looking historically it’s not that bad,” Lucas said.
It’s a mental adjustment more home buyers are starting to take as the market picks up this May.
“Pending sales were up 5.6 percent, so that’s good, we’re starting to see the market pick up, people coming out, they’re sick of waiting, people are getting used to the interest rates,” Allen said.
Allen says homes priced under $500,000 are still selling extremely fast and RASE expects that competition and higher home prices to continue as the inventory of homes listed for sales isn’t expected to increase as much as needed this summer.