Sioux Falls is seeing a big increase in the sale of million dollar homes.
The Realtor Association of the Sioux Empire reported a 100% increase in 2019 for the $900,000 to $1 million price range.
“A year ago there were seven homes that sold, this past year there were 14 homes that sold in that price range,” Gregg Gohl with Hegg Realtors said. “So we’re not talking huge amounts of homes compared to the 4,800 homes that sell each year here in our market.”
While these high end homes account for only a small percentage of the overall home sales in Sioux Falls, Gohl says the increase in the luxury home market has been significant.
“We look at that luxury market as $750,000 or above, there’s certainly been a significant increase over the last decade in that market, we’re probably selling three times the amount of homes in that price range than we used to sell.”
The increase is being felt on the very upper end of the luxury home market as well.
“In the $1.5 million and up, in 2018, we didn’t sell any, and then I went and pulled numbers from 2019 to today, and we’ve sold six in that price range. That’s a huge big market that doesn’t include new construction,” Beth Jamison with Jamison Real Estate Company said.
Jamison deals in a lot of the land sales for custom home construction.
“It has tripled how quickly our land has sold on the south side of Sioux falls in the last year,” Jamison said.
It’s a booming business in luxury homes that aren’t included in the realtor association’s statistics.
“Our monthly numbers only indicate what’s listed on the market, it doesn’t usually indicate someone who’s building a custom home out there,” Gohl said.
The popularity of custom luxury homes does impact the ability to sell current high end real estate.
“It’s more difficult to sell simply because it’s a more limited buying pool,” Gohl said. “If you’re a buyer in that price range, there’s quite a bit of inventory to look at.”
“From a $1 million to $1.5 million we have 15 homes in that price range on the market,” Jamison said. “It’s a good time for a buyer.”
Both realtors say the low interest rates are also factoring in to this boom in luxury home sales.
“Where they’re at right now a person can afford a $900,000 house, where if interest rates were 4.5% or in that range, they could maybe only afford a $750,000 price,” Gohl said.
Overall, these real estate agents say the increase in Sioux falls luxury home market speaks to the city’s continued growth.
“The income bracket of the new people we’re bringing into Sioux falls has really changed,” Jamison said.
“The city is bringing a bunch of people in, about 4,000 people per year, the economy is great, interest rates are low, all of the stars are aligning for the housing market,” Gohl said.