Average Sales Price
Days on Market Until Sale
Months Supply of Inventory
Source: REALTOR® Association of the Sioux Empire, Inc.
Based on the above statistics, we have made an educated hypothesis on how the housing market will go in the coming months in Sioux Falls, South Dakota.
While the mortgage rates are rising, the demand for houses is still high as the market is even more undersupplied than last year. As a result, housing prices in Sioux Falls will likely stay the same or steadily rise at a much slower rate because of the competitive seller's housing market but high-interest rates.
According to market data, the housing market for the whole Minnehaha County area (the county in which Sioux Falls resides) follows the same trends as in Sioux Falls. For example, average sales prices are up, and active listings are down year-over-year in September. Some cities in the Minnehaha County, South Dakota area include Sioux Falls, Brandon, Dell Rapids, and Valley Springs.
Similar housing market trends are in effect throughout the state of South Dakota.
However, the time on the market will continue to increase slowly. It is no longer the trend for buyers to feel the need to skip inspection or go well beyond the list price. And sellers still often think that the housing market is in the same position as it was in 2021. As a result, it can take longer for a buyer to accept a buy from a seller. So, for now, while buyers can still expect their home to sell in the Sioux Falls area easily, sellers should also not expect interested buyers to put in offers immediately or to get way over the market value price.
Additionally, housing prices are continuing to sell much higher than last year. There is an 11.2% increase in average home sale prices in Sioux Falls from September 2021 to September this year.
We predict that the Sioux Falls housing market will continue to be a seller's market in the United States going into 2022. However, people are not holding off as they foresee a crash shortly with incredibly high-interest rates. So, we also predict that buyers will start seeing more of an inventory of homes in the Sioux Falls area, but we still predict that the real estate activity to continue to grow into 2023.
However, we also predict that there will continue to be limited housing and properties available for a while as the market studies, and interested buyers and renters may have to pay more than they are right now for their housing choice when looking in the Sioux Falls and other neighboring cities such as Brandon and Dell Rapids, South Dakota.
The Sioux Falls area has always brought in interested investors and homebuyers as its affordable market brings in investors. However, many other cities throughout Minnehaha County are also great investment opportunities. In addition, investors know that the Minnehaha County area has relatively affordable median property prices and a high potential for returns if one chooses to rent short-term.
The Minnehaha area is full of activities but is also a great location to raise a family.
With the strong job market and relatively high demand for housing, the Minnehaha County area is a great area to invest in real estate in the coming months when done correctly.
The Minnehaha County real estate market is still competitive despite high-interest rates and remains a seller's market as there is more demand than supply.
In September, the Sioux Falls housing market had 2.5 months of inventory, an almost 24.2% decrease since last year. So again, the higher interest rates contribute to the increased market time.
For the real estate market to switch to a buyer's market, the inventory needs to increase by several months. The Sioux Falls housing market could become a buyer's market, but likely not for a while. Therefore, those looking to purchase real estate in the Minnehaha County area during the upcoming months should consider that it is still a seller's market before submitting an offer.
Why are fewer (-17.9% year-over-year in September 2022) closed sales within the Sioux Falls area when homes are selling for more than they were on average less year?
Well, fewer homes are going on the market. So the demand is still high, but the supply is low. And, even though homes are staying on the market longer than they were last year, they still are selling at a fast enough rate where the supply of inventory is pretty low.
Houses for sale across Sioux Falls and the surrounding areas are getting fewer multiple offers and rarely sell without an inspection. However, with few homes on the market, the Sioux Falls area housing market is still strong. The imbalance of homes available versus interested buyers in the area makes Sioux Falls a hot market and a dream for home sellers.
Therefore, we predict the Sioux Falls area will still be a seller's market going into 2023.