Home prices have dropped in the majority of the country, but not much in South Dakota, despite job losses due to the credit crunch. The giant credit card industry has made job cuts in the state but South Dakota hasn't had the hundreds of thousands of lay-offs other areas of the country have to damage its housing markets.

New home construction lags below last year's record levels. Despite the national recession, Sioux Falls is still growing, attracting news businesses and boosting employment. However, financial giant City-Group slashed 122 jobs at its credit card operation in Sioux City. City leaders were pleased the job losses weren't higher considering the company's major losses in the credit crisis on Wall Street. The state has become a haven for credit card companies because of the state's liberal usury laws.

However, while not high by national standards foreclosures are beginning to have an impact on the state's housing market. They've been shooting up over the last year, which will hurt the Sioux Falls housing market in 2009. Sioux Falls is projected to sustain slower home sales through the year and deflate for the first time in more than five years at an average rate of 2.6% per home.

In Rapid City, new businesses have moved in to the area to produce a stable job market in retail and the sciences. Agriculture and tourism also give South Dakota an extra boost. Residential real estate has grown with the development of new homes, helping to boost the average price.

City	Forecast
Sioux Falls	− 2.6%
Rapid City	− 2.8%
Black Hills	− 2.1%
Piedmont	− 1.5%

The strong local economy and growing job market will help Rapid City remain stable throughout 2009, according to Housing Predictor analysts. Home sales will be soft but since the fall out from foreclosures is relatively minor Rapid City should hold its own and is forecast to appreciate a light 2.8% for the year.

Rapid City is the state's second largest city and has grown for more than five years. The recession is likely to have more of an impact. But as one of the least populated states in the country, South Dakota has been offering companies tax incentives to move to their state and hire employees. The new businesses have added to a growing economy, which has become more stable than others. Despite its cold winters, residents are hopeful that the housing market will continue to have the sustainability it historically has had with minor appreciation and deflation.

In Piedmont north of Rapid City the distant sound of hammers has stopped for now as home construction slows to a crawl. The boom seems to have waned at least for now. Piedmont is forecast to deflate a moderate 1.5% in average housing values in 2009.

While the Black Hills and Piedmont were growing with new residents, much of the growth in the area has slowed at least for now, slowing home sales. Sales are projected to remain tame through 2009 on forecast deflation of 2.1% on the average home in Black Hills.