Homebuyers looking for bargains and others buying up foreclosed properties are driving down the median sale price of Sioux Falls-area homes.
But most homes still are holding value, those in the industry say.
A national report released earlier this week said the median sale price of existing single-family homes in the metro area fell almost 30 percent in the first quarter of the year, compared to a year ago. The median price - the single sale that ranks in the middle of all existing sales - was $95,500, according to the National Association of Realtors.
Local Realtors say that drop is out of line with the numbers they have tracked locally.
Instead, the median sales price for March has fallen 7.4 percent in the Sioux Falls metro area, to $132,000, said Barton Hacker, chief executive officer of the Realtor Association of the Sioux Empire. The organization tracks local statistics for Realtors.
"Our market is not 30 percent off in price," Hacker said.
While the national and local organizations both defend their numbers, they also agree that homebuyers are looking for bargains and, because of government and other incentives, many first-time homebuyers are able to buy less expensive houses. In addition, several foreclosed properties, which vary in price but often include low-priced homes, also have been selling.
All of those things push the median sale price down. The median is not affected by one or two very high- or low-priced sales as dramatically as the average home price.
The drop in the price of homes that have been selling is not reflective of the value in the market, said Walter Molony, spokesman for the national association. The agency is finding the same kind of drop nationwide, he said.
Half of all houses selling nationally are called "distressed," often meaning foreclosed homes, Molony said. In addition, half of all houses sold are going to first-time homebuyers who buy at the low end of the price range.
"If you have got half of the homes being sold at deep discount, you see how that can affect the price," he said.
Sioux Falls Realtors see lower-priced homes selling more often than higher-priced homes, as well.
"Buyer preferences have gone to less expensive homes," Hacker said.
"We've got consumers going into houses and lowballing offers," he said. "People have this unrealistic expectation of what's going on in the marketplace."
Sellers still are getting about 92 percent of their asking price, compared to previously getting about 96 percent, said Hacker, citing local real estate data.
Realtor Rick Sawvell with Hegg Realtors said that after 20 years handling foreclosed properties, he can tell that the market is up.
"From my perspective, my inventory has doubled compared to what it used to be two years ago," he said.
While he used to have 15 to 25 homes in the process of being foreclosed and sold, at the beginning of this year, he had as many as 60.
Because of a moratorium on foreclosures, that business has slowed some recently, he said.
"The banks are still trying to work out arrangements with previous owners," Sawvell said.
Realtor Sheila Hoff with Lloyd Cos. said sales have been slow, and high-end home sales have slowed dramatically.
Shoppers want to negotiate for a home these days, and they often walk away if a seller doesn't negotiate, she said.
"They want to feel like they're getting a bargain."
Other Realtors see the same trends. Harlan TenNapel with AmeriStar Real Estate said sales numbers show that fewer homes overall are selling, and many homes are staying on the market longer.
In the $300,000-and-above price category, sales are hurting, he said.
When it comes to the supply of homes on the market, homes priced up to $100,000 are shrinking in supply, according to numbers TenNapel tracks. Three months ago, data showed there was an eight-month supply of those homes. Now, it is down to a 5.8-month supply.
The reverse is true for higher-priced homes. The supply for homes in the $450,000 category is 81.2 months, compared to 30 months three months ago.
Some of that shift comes from first-time homebuyer interest.
Incentives from taxes to offerings from Lutheran Social Services are exciting for first-time buyers, said Bill Zortman with Key Real Estate. The $140,000 to $165,000 price category is competitive, he said.
"We're starting to see money that is being generated to try to get people in the door," he said. "People are back in the market. They're starting to see there are houses there."
But people are not finalizing sales as quickly as they once did, he said. "What we are finding is your professionals have got to be really hands on," he said.
