Sioux Falls Housing Market: Trends and Forecast 2024-2025

Thinking about buying or selling a home in Sioux Falls? Understanding the current Sioux Falls housing market trends is key. This article breaks down the latest data, providing insights into home sales, pricing, inventory, and overall market direction. Let's dive in!

Sioux Falls Housing Market Trends: A Deep Dive

Home Sales in Sioux Falls

The Sioux Falls housing market is dynamic, constantly shifting and evolving. Recent data from the REALTOR® Association of the Sioux Empire (RASE) paints a fascinating picture. While the overall number of closed sales fluctuates, it's clear the market remains active.

Looking at the numbers, pending sales—homes under contract—saw a significant jump. The increase in pending sales usually indicates future closed sales will also be strong. This suggests a healthy level of buyer interest.

• Closed Sales (Year-to-Date): Significant increases are evident in year-over-year comparisons for 2024 versus 2023. This generally reflects a robust market.
• Pending Sales (Year-to-Date): A noticeable spike in pending sales in 2024 shows high buyer demand. This signals a seller's market.
• New Listings (Year-to-Date): This signifies how many homes are coming onto the market. Even with a slight increase in new listings, the market still leans toward a seller's market due to high demand.

Year	Closed Sales (YTD)	Pending Sales (YTD)	New Listings (YTD)
2023	3,435	380	5,882
2024	3,777	484	5,967

My personal observation, having worked with numerous clients for years, is that buyer expectations need to be realistic. While there's healthy activity, finding the perfect home quickly may require some flexibility and patience.

Home Prices in Sioux Falls: Climbing Higher?

The median and average sales prices in Sioux Falls continue to climb steadily. This growth, while perhaps not as dramatic as it was a few years ago, shows that home values remain strong.

• Median Sales Price: This is a great indicator of the “typical” home price. The year-over-year increase shows consistent growth.
• Average Sales Price: This figure takes into account all sales, providing a broader look at home prices across various price points.
• Percent of Original List Price Received: This metric indicates how close the final selling price is to the original asking price. A figure near 100% suggests a strong seller's market.

Metric	2023	2024	Change
Median Sales Price	$315,000	$320,000	+3.9%
Average Sales Price	$361,293	$363,026	+3.7%
Percent of Original List Price	98.7%	98.7%	-0.1%

The persistent growth in home prices reinforces the significance of working with a seasoned real estate agent to navigate this market effectively. Pricing your home appropriately is crucial to ensure it attracts the right buyers and achieves a desirable selling price.

Housing Supply in Sioux Falls: A Tight Market?

The availability of homes for sale remains a crucial factor. Lower inventory often leads to higher prices and increased competition among buyers. The number of homes for sale in Sioux Falls continues to provide a relatively tight market.

• Inventory: The total number of active listings on the market. Lower inventory generally signals a seller's market, while higher inventory indicates more choices for buyers.
• Months Supply of Homes: This indicates how long it would take for the current inventory to sell at the current pace of sales. A lower months' supply is indicative of a seller's market, while a higher months' supply indicates a buyer's market.

Metric	2023	2024	Change
Inventory of Homes for Sale	1,708	1,653	-3.1%
Months Supply of Homes	4.7 months	4.7 months	-7.8%

While the inventory isn't drastically low, this data suggests we're still in a seller's market. This could be due to several factors: strong local economy, population growth, and limited new construction. Buyers need to be prepared for competitive offers.

Days on Market (DOM): How Long Does It Take to Sell a Home?

Days on Market (DOM) is a key indicator of how quickly homes are selling. A shorter DOM usually indicates a strong seller's market. In Sioux Falls, the DOM has remained relatively stable (+1.3% YoY). This isn't necessarily bad news for sellers; it means the market is efficient and homes are still finding buyers in a reasonable timeframe.

Sioux Falls Housing Market Forecast 2024-2025

Predicting the future of the Sioux Falls housing market is never exact. However, based on current data, we can form some informed opinions:

• Continued Price Growth: While the pace of price increases might moderate, further price appreciation seems likely in the near term.
• Steady Sales Activity: Expect consistent sales activity, although it might fluctuate seasonally. High demand and relatively low inventory are both expected to persist.
• Competitive Market: Buyers should expect to face some competition and be prepared to act quickly and decisively when they find a property they like.

As of late 2024, the Sioux Falls housing market shows an average home value of $325,716, according to Zillow. That's a 2.8% increase over the past year. But averages can be deceiving. Averages include mansions and modest homes. The median price might paint a clearer picture.

The 2.8% increase suggests a generally healthy market, but let's dig deeper. I've been following the Sioux Falls market for years, and my personal experience tells me that while prices are up, we're not seeing the explosive growth of previous years. There's a greater balance between buyers and sellers now than we experienced in the hyper-competitive market of 2021-2022.

Sioux Falls MSA Forecast: October 2024 – September 2025

Let's look at some projected data, keeping in mind these are forecasts, not guarantees. It’s important to understand that economic conditions can change rapidly. The data provided should be considered a general projection subject to variation.

Month/Period	Housing Market Change (%)	Interpretation
October 2024	+0.2	Slight increase; the market is expected to continue showing modest growth.
December 2024	-0.1	Potential slight dip; possible seasonal slowdown or temporary market adjustment.
September 2025	+0.5	A bounce-back with a noticeable increase towards the end of the year.

Important Note: This data likely uses a Metropolitan Statistical Area (MSA) approach, including surrounding areas. It’s important to understand this is a broad overview and the specifics may vary within Sioux Falls.

Will Home Prices Drop in Sioux Falls? Will There Be a Crash?

The million-dollar question! Based on the Sioux Falls housing market forecast and my observation, a significant crash seems unlikely. The current growth rate is moderate, not feverish. The market appears to be settling into a more sustainable pace. While a slight dip is possible (as seen in the December 2024 projection), it's not likely to be a drastic fall. However, factors such as national economic trends, interest rates, and local job markets can influence this forecast.

Sioux Falls Housing Market Forecast for 2026 and Beyond

Predicting beyond a year out is tricky, even for experienced analysts. Too many variables can unexpectedly impact the market. However, based on current trends and economic forecasts that factor in job growth, population growth and continued expansion, we can assume:

• Moderate Growth: We can expect a modest increase in home values in 2026. It’s not likely to be a dramatic boom, but rather a steady, sustainable growth rate.
• Stable Market: The market will likely remain more balanced than what we witnessed during periods of intense price growth.

Factors Influencing the Sioux Falls Housing Market

Several factors beyond national economic trends affect the Sioux Falls housing market:

• Job Growth: Strong job growth in the area boosts demand for housing.
• Population Growth: An increase in the population increases demand for housing, thus driving prices up.
• Interest Rates: Higher interest rates make mortgages more expensive, potentially slowing down the market.
• Inventory: Low inventory creates a seller's market, pushing prices higher. Higher inventory shifts the balance towards the buyer.
• Local Development: New construction projects can both increase supply and impact local demand.

In conclusion, the Sioux Falls housing market shows promise for moderate, steady growth in the coming years. While a significant crash appears unlikely, it's crucial to stay informed and adapt to potential shifts in the market. Remember this is just a forecast, and individual results may vary. Consult with a real estate professional for personalized guidance.