The state’s housing market can change minimally or drastically year to year, but halfway through 2017, there are a few things we’ve noticed. Whether it’s based on home sale numbers, prices or region, the housing market in South Dakota has some unique qualities.
Here are a few things that buyers and sellers (and agents and developers) should know about the housing market in South Dakota in 2017.
It’s a seller’s market
Whether you’re east or west river, the major metros in South Dakota are seeing something of a shortage in available housing this year. But demand remains strong. This means that buyers may not have the options they’re used to having in cities like Sioux Falls and Rapid City—and sellers may be able to sell a property for a higher amount than they normally would.
Interest rates are tracking lower
While interest rates on mortgage loans may have hit a peak about 10 years ago when the housing bubble burst nationally, South Dakota’s rates have been in a downswing ever since. Averages rested around the 6-7% range a decade ago, while rates now are comfortably in the 3-4% range, depending on the type of loan for which you're applying.
Urban housing prices are at record highs
Housing in the Sioux Falls region is seeing a marked increase in cost. The median sale price for the city is at around $194,450 as of June, according to the Realtor® Association of the Sioux Empire. The average time a house stays on the market has decreased too, to 87 days.
(For first-time homebuyers having trouble finding an affordable place to live, South Dakota Housing Development Authority offers lending and home search tools to make it a reality—check it out here.)
Affordable housing is popular
Since South Dakota is in a seller’s market, homes are selling at a faster rate than in previous years. This is particularly evident among homes on the lower end of the price scale—especially ones priced at less than $200,000. While developers in major markets are trying to keep pace with demand, the supply of affordable housing is lower than normal and may require buyers remain vigilant when it comes home-searching.
Rental housing is regionally affordable
When comparing apples to apples with other states in the region, South Dakota’s rental housing market is more affordable than Minnesota, North Dakota, Wyoming, Montana, Nebraska and Iowa, according to the National Low-Income Housing Coalition. The hourly wage required to afford a two-bedroom apartment is lower here than elsewhere in the Midwest.
If you’re a first-time homebuyer that meets certain income standards, you can get assistance in entering the South Dakota housing market. Find out if you're eligible for the First-Time Homebuyer Program from South Dakota Housing Development Authority. It offers lending, downpayment and closing-cost assistance.