Protected at least to a large degree by the lack of new creative mortgage products not sold in the state, South Dakota housing markets are performing at healthier levels than the majority of the country. However, the housing up turn and overall economic recovery are projected to be a long protracted ordeal.
Job losses in manufacturing, retail sales and construction are slowing progress. More active home sales may not develop for another year in most of the state.
Home sales have been slow in Rapid City as a result of fallout from the financial crisis. But the community has held its own in the housing downturn. Housing sales are sluggish and are projected to remain that way until mortgage lending loosens up.
However, once the mortgage lending pipeline is unclogged Rapid City and the rest of South Dakota is in the enviable position of experiencing home price inflation on a wide scale. Rapid City has had few foreclosures as a result of the downturn and is forecast to appreciate 2.8% in 2010.
| City |
Forecast |
| Sioux Falls |
2.7% |
| Rapid City |
2.8% |
| Black Hills |
2.2% |
| Aberdeen |
2.1% |
Outside of Rapid City, real estate construction of new homes slowed more than a year ago, but as more people move to the area for jobs home sales are projected to pick-up and prices will follow. Sales should get a push from the expansion of the first time home buyers tax credit and addition of move-up buyers in the first part of the year. Black Hills average housing values are forecast to rise 2.2% by year's end.
Sioux Falls has weathered the national economic storm strongly compared to the majority of the country, ranking 12th in a recent economic poll for cities equal to its size. As the most populated city in the state, Sioux Falls housing market has maintained a slow pace of sales, despite government incentives for first time buyers as perspective buyers largely held off making a decision in the current economic environment.
Neither have the price of homes declined in Sioux Falls, where new mortgage loan requirements are restricting the market to many new homeowners. Sioux Falls should see more home sales in 2010 as the market begins to stabilize and step away from being caught up in national financial sluggishness. Sioux Falls average home prices are forecast to appreciate a moderate 2.7% by year's end.
Since few foreclosures impacted South Dakota markets and the rapid level of appreciation experienced else where didn't develop in the state, the fall out has been less dramatic.
Aberdeen never really boomed during the national frenzy, and home values have budged very little as a result. The market should show signs of progress with more home sales in 2010 on forecast housing inflation to average 2.1% as more new job seekers move to the area.
