South Dakota Housing Market: Trends and Forecast 2025-2026

So, you're curious about the South Dakota housing market? You've come to the right place! The South Dakota housing market is transitioning to a more balanced state after a period of rapid growth. Increased inventory, a moderate decrease in sales, and homes staying on the market a bit longer are positive signs for buyers.

However, local market conditions vary significantly. This in-depth look at South Dakota housing market trends will provide you with the insights you need, whether you're a potential buyer, seller, or just someone interested in real estate. We'll explore everything from current home prices and inventory levels to future market predictions.

South Dakota Housing Market Trends: A Deep Dive

Home Sales in South Dakota

Let's start with the big picture: home sales. In September 2024, according to Redfin, 737 homes were sold in South Dakota. That represents a 7.1% decrease compared to the same period last year. While a decrease might seem alarming, it’s crucial to consider the broader context. We saw a significant boom in the market during the pandemic, so a correction wasn't unexpected. This slowdown doesn't necessarily signal a market crash; instead, it might indicate a return to a more balanced and sustainable market.

Here’s a table summarizing the key data points from Redfin for September 2024:

Metric	Value	Year-over-Year Change
Median Sale Price	$321,300	+6.5%
# of Homes Sold	737	-7.1%
Median Days on Market	57	+6%

This data suggests that while fewer homes are selling, the prices remain relatively stable. The increase in the median days on market from 51 to 57 days suggests homes are taking a little longer to sell, giving buyers more time to negotiate. This is a good thing for buyers!

Realtor.com data provides a more granular look at the market at the county level. While this data doesn't reflect the same time frame as Redfin, it still gives us valuable insights into different areas of South Dakota:

County	Median Listing Price	Listing $/SqFt	Homes For Sale	Homes For Rent
Pennington County	$389,500	$231	852	48
Minnehaha County	$359,500	$196	1,419	78
Lawrence County	$749,900	$300	668	11
Lincoln County	$384.9K	$203	708	28

As you can see, there is significant price variation across counties. Pennington and Minnehaha counties, home to Rapid City and Sioux Falls respectively, show consistently higher prices and listing volumes, reflecting their status as major population centers.

Home Prices in South Dakota

The median sale price in South Dakota in September 2024 was $321,300, a 6.5% increase year-over-year. This growth is a strong indicator of a healthy market, although the pace of growth is slowing down. Again, this is likely a natural adjustment after the rapid price increases we've seen in recent years.

Analyzing the data from Realtor.com, we can see significant price differences between counties. This variation underscores the importance of conducting local market research when buying or selling. For instance, Lawrence County boasts a much higher median listing price than other counties, likely due to factors such as tourism and proximity to attractions like the Black Hills.

South Dakota Housing Supply

As of September 2024, the South Dakota housing supply was 3,977 homes for sale, an 11.8% increase year-over-year. This increased inventory is a positive sign for buyers, offering more choices and potentially less competition. The months of supply remained at four, suggesting a relatively balanced market, not leaning heavily toward either buyers or sellers.

Metric	Value	Year-over-Year Change
# of Homes for Sale	3,977	+11.8%
# of Newly Listed Homes	928	+1.1%
Months of Supply	4	+0%

While more homes are on the market, it’s important to note that this number might not be uniformly distributed across the state. Some areas might still experience limited inventory, leading to higher competition.

Market Trends in South Dakota

The current trends in the South Dakota housing market suggest a shift towards a more balanced state. We're seeing a cooling off after the hectic pace of the past few years. Increased inventory, a slight dip in sales, and homes taking a little longer to sell all contribute to a more buyer-friendly environment. However, it’s important to keep in mind that local markets can vary significantly, especially between urban centers and rural areas. This means local research is critical.

Top Metros with Fastest Growing Sales Prices

Here's a glimpse into some of the hottest markets within South Dakota, showing percentage year-over-year growth in sales prices (Redfin):

City	Growth % YoY
Aberdeen, SD	18.8%
Rapid City, SD	10.7%
Sioux Falls, SD	1.3%
Watertown, SD	-9.6%

Top 10 Most Competitive Cities in South Dakota

This list provides a different perspective, highlighting cities with the highest percentage of homes selling above list price:

City
Huron, SD
Aberdeen, SD
Yankton, SD
Vermillion, SD
Mitchell, SD
Milbank, SD
Dell Rapids, SD
Canton, SD
Belle Fourche, SD
Summerset, SD

Based on my analysis of the data and my years of experience in real estate, I believe the South Dakota housing market is stabilizing after a period of rapid growth. While prices are still increasing, the rate of increase is slowing down. The increased inventory benefits buyers, offering more options and less pressure to make quick decisions. However, this doesn't mean the market is weak. It simply represents a shift to a more balanced dynamic.

South Dakota Housing Market Forecast 2024-2025

Predicting the future of any market is speculative, but based on current trends, I anticipate a continuation of this stabilization. While rapid price increases are unlikely, I don’t foresee a significant drop in home prices either. The market will likely remain relatively stable in the coming year, with gradual price adjustments based on local factors like supply and demand.

As of late 2024, the average home value in South Dakota sits at $307,799, according to Zillow. That's a 2.3% increase year-over-year. Homes are spending around 22 days on the market before going pending, suggesting a relatively brisk sales pace. However, this average masks significant regional differences. Some areas are booming, while others are seeing slower growth or even declines. This is something to watch closely if you’re planning a move.

Regional Breakdown: A Deeper Dive into South Dakota's Housing Markets

The South Dakota housing market isn't a monolith. Different regions tell different stories. Let's examine the forecast data for key Metropolitan Statistical Areas (MSAs) for the next year.

Region Name	Region Type	State	Forecast Date	October 2024 (%)	December 2024 (%)	September 2025 (%)
Sioux Falls, SD	MSA	SD	30-09-2024	0.2	-0.1	0.5
Rapid City, SD	MSA	SD	30-09-2024	0.4	0.2	1.8
Aberdeen, SD	MSA	SD	30-09-2024	0	-0.3	-1
Watertown, SD	MSA	SD	30-09-2024	-0.1	-0.6	0.1
Brookings, SD	MSA	SD	30-09-2024	0.4	0.1	0.2
Spearfish, SD	MSA	SD	30-09-2024	0.2	0.3	2.1
Mitchell, SD	MSA	SD	30-09-2024	0.2	-0.2	0.1
Yankton, SD	MSA	SD	30-09-2024	-0.6	-1.5	-2.3
Pierre, SD	MSA	SD	30-09-2024	0.4	0.1	-0.3
Huron, SD	MSA	SD	30-09-2024	-0.2	-1.3	-3.5
Vermillion, SD	MSA	SD	30-09-2024	0.6	0.5	1.9

(Note: These percentages represent the projected change in home values from the base date.)

From the data, it's clear that Rapid City and Spearfish show the most promising growth outlook for the next year, potentially attracting investors and buyers looking for strong returns. On the other hand, Huron and Yankton present a more cautious picture, with potentially softening home values. Sioux Falls, the state's largest city, shows moderate growth, reflecting a more balanced market. These regional variations highlight the need for hyperlocal market research when making property decisions.

Will Home Prices Drop in South Dakota? Will There Be a Crash?

This is the million-dollar question, and unfortunately, there’s no crystal ball. While some regions show potential for price declines, a full-blown market crash seems unlikely in South Dakota. Several factors contribute to this outlook:

• Relatively Low Inventory: While not as severe as in some other states, South Dakota still faces supply constraints in many areas. Low inventory tends to support prices.
• Steady Population Growth: South Dakota has seen consistent population growth, and this increased demand continues to influence housing prices.
• Strong Economy: South Dakota boasts a relatively robust and diverse economy, supporting homebuyers' purchasing power.

However, interest rates remain a major factor. Rising interest rates could cool the market, potentially leading to price stabilization or even slight decreases in certain areas. But a sharp, widespread price crash appears unlikely based on current conditions.

South Dakota Housing Market Forecast for 2026 and Beyond

Predicting the market beyond a year is speculative, but considering the trends above, we can anticipate:

• Continued Regional Variation: Some areas will experience better-than-average growth, while others may see slower growth or slight corrections. This makes localized market analysis even more crucial.
• Moderate Price Growth: While a dramatic increase isn't expected, modest, steady growth remains a reasonable assumption for the overall state.
• Influence of Interest Rates: The Federal Reserve's monetary policy will play a significant role in shaping the 2026 market.

Remember, these are educated guesses based on the available data. Local market conditions and unforeseen events can always impact the forecast.

Conclusion:

The South Dakota housing market forecast paints a picture of a dynamic market with regional nuances. While overall growth remains moderate, individual markets offer varying opportunities and challenges. Thorough research tailored to your specific area of interest is essential for successful navigation. Whether you are buying, selling, or just watching the market, understanding these trends and their underlying causes will help you make informed decisions.