Sioux Falls Housing Market for 2023: An Overview
The Sioux Falls housing market has been on a roller coaster ride for the past year, with rising interest rates, limited inventory, and affordability challenges causing fluctuations in buyer and seller behavior. As we move into 2023, let's take a closer look at the latest market statistics to gain insight into what we can expect in the coming months.
Sioux Falls Monthly Market Indicators
The Federal Reserve's continued efforts to curb inflation led to an eighth interest rate hike in February, bringing the benchmark rate to 4.50% – 4.75%. While mortgage interest rates have decreased slightly from their peak last fall, affordability constraints continue to limit homebuyer activity. Existing home sales have declined for the twelfth consecutive month, according to the National Association of Realtors.
New listings in the Sioux Falls region decreased by 24.1% while pending sales increased by 15.7%. Inventory levels fell by 10.4% to 943 units. Median sales prices increased by 7.0% to $289,000, and days on the market decreased by 5.9% to 80 days. Months supply of homes for sale increased by 4.3% to 2.4 months, according to the REALTOR® Association of the Sioux Empire, INC.
Housing Supply Overview
Purchases of new single-family homes increased by 7.2% month-over-month, according to the US Census Bureau. A limited supply of existing homes on the market, lower mortgage interest rates, softening sales prices, and an increase in builders offering sales incentives boosted new home purchases, causing builder confidence to increase for the second consecutive month in February.
Pending sales in the Sioux Falls region were down by 14.6% overall for the 12-month period spanning March 2022 through February 2023. The price range with the most significant gain in sales was the $900K to $1M range, where sales increased by 76.5%. The overall median sales price was up by 14.0% to $297,000, with the new construction segment seeing the most significant price gain of 14.3% to $350,000.
Market-wide, inventory levels were down by 10.4%. The new construction segment saw the most significant gain in inventory, increasing by 17.6%. Single-family homes had 2.3 months supply, while condos had 3.2 months supply. The price range that tended to sell the quickest was the $200K to $250K content at 61 days, while the price range that tended to sell the slowest was the $1M and above range at 98 days.
What to Expect in 2023?
With buyer demand down from peak levels and sales activity remaining down heading into spring, home price growth has continued to slow nationwide, although prices remain up from a year ago. However, with new home purchases on the rise and builder confidence increasing, we may see an increase in inventory levels and more favorable conditions for buyers.
Sellers may need to continue cutting prices and offering incentives to attract buyers struggling with affordability challenges. With interest rates remaining at historically low levels, buyers may be motivated to enter the market if they can find homes within their budget.
The Sioux Falls housing market for 2023 is likely to see continued fluctuations as buyers and sellers adapt to changing conditions. Limited inventory and affordability constraints may continue to put pressure on homebuyers, while new home purchases and increased builder confidence may help boost inventory levels. As always, working with a knowledgeable and experienced real estate agent can help buyers and sellers navigate the market and make informed decisions.
Sioux Falls Home Prices and Market Trends in 2023
If you're looking to buy or sell a home in Sioux Falls this year, you may be wondering what the housing market looks like. According to a recent report by Redfin, the market is somewhat competitive, with homes selling for a median price of $285,000 as of January 2023, up 2.3% from last year. In this blog post, we'll explore what's driving the housing market in Sioux Falls and what you can expect if you're looking to make a move in the coming months.
The average sale price per square foot in Sioux Falls is $166, up 2.8% since last year. This increase in price can be attributed to a number of factors, including a shortage of available homes for sale and a growing demand for housing in the area.
Sioux Falls is considered somewhat competitive, with homes selling after an average of 58 days on the market, compared to 43 days last year. While this means that homes may take a bit longer to sell than in previous years, it also indicates that there is still a healthy demand for homes in Sioux Falls.
Sale-to-List Price Ratio in Sioux Falls
According to the report, the average home in Sioux Falls sells for about 1% below the list price, with hot homes selling for around list price and going pending in around 34 days. This suggests that while homes may be on the market for slightly longer than in previous years, sellers can still expect to receive a fair price for their property.
Overall, the Sioux Falls housing market is somewhat competitive in 2023, with prices up slightly from last year and homes taking a bit longer to sell. However, there is still a strong demand for homes in the area, and sellers can expect to receive a fair price for their property. If you're considering a move to Sioux Falls, be sure to explore the local schools and transportation options, and keep in mind the natural hazards and environmental risks that may affect the area.
Sioux Falls Housing Market Forecast 2023-2024
The Sioux Falls housing market has been a hot topic in recent years and with good reason. The city's growing population and a strong economy have led to a surge in demand for housing, resulting in a tight market with rising prices. With the release of the latest reports on the housing market in Sioux Falls, SD, we can expect some interesting trends and predictions for 2023. The following housing market trends are based on single-family, condo, and townhome properties listed for sale on Realtor.com. Land, multi-unit, and other property types are excluded.
Price Trends
The report shows that the median home price in Sioux Falls, SD, is $253,000, which is up 17.4% from last year. This increase is a clear indication that the housing market in Sioux Falls is still strong and that prices are likely to continue rising in 2023. It's important to note that this increase is higher than the national average, which is around 11%. This difference is a testament to the city's growing economy and demand for housing.
Sioux Falls Zillow Home Values Index
The Sioux Falls housing market has been on the rise in recent years, and 2023 is no exception. According to a recent report released by Zillow, the average home value in Sioux Falls is $300,398, up 7.8% from the previous year. This positive trend is expected to continue in the coming year, making it an excellent time to invest in real estate in Sioux Falls.
Predictions for 2023
Based on the data in the report, we can make some predictions for the Sioux Falls housing market in 2023. With its strong economy, affordable cost of living, and desirable neighborhoods, Sioux Falls is an attractive destination for anyone looking to buy or sell a home in 2023. First, we can expect to see a continued increase in home prices, as the demand for housing continues to outpace supply.
This increase will likely be higher than the national average, as the city's economy continues to grow and attract new residents. We can also expect to see new developments and new construction in 2023, as builders look to capitalize on the demand for housing in Sioux Falls. This development will likely focus on new home communities and apartment complexes, as well as renovations and upgrades to existing properties.
Finally, we can expect to see the rental market continue to grow, as more people choose to rent rather than buy in the current market. This growth will likely lead to increased competition for rental properties, which could drive up rental prices. The Sioux Falls housing market is likely to remain strong in 2023, with rising home prices, new developments, and a growing rental market. If you're looking to buy or rent in Sioux Falls, it's important to act quickly and work with a knowledgeable real estate agent who can help you navigate this competitive market.
Source: Zillow
Should You Invest in the Sioux Falls Real Estate Market?
Sioux Falls, South Dakota is a city that has been attracting a lot of attention from real estate investors in recent years, thanks to its strong economy, affordable housing, and high quality of life. If you're considering investing in the Sioux Falls real estate market, there are many compelling reasons to do so. The city's economy is diverse and growing, with major employers in healthcare, finance, and manufacturing, which has created a strong demand for housing, especially in the rental market.
Additionally, Sioux Falls has a growing population and is consistently ranked as one of the best places to live in the United States. With a focus on the keyword “Sioux Falls real estate market,” it's clear that this city is a promising destination for real estate investors looking for a stable and profitable market. However, as with any investment, it's important to weigh the potential risks and benefits before making a decision.
If you're considering investing in the Sioux Falls real estate market, here are some top reasons why it might be a good idea:
- Strong job market: Sioux Falls has a diverse and growing economy, with major employers in industries like healthcare, finance, and manufacturing. This means that there is a steady demand for housing, and the rental market is particularly strong.
- Affordable housing: The cost of living in Sioux Falls is relatively low compared to other parts of the country, which means that housing prices are also relatively affordable. This can make it easier to generate cash flow from rental properties, and there may also be potential for appreciation over time.
- Growing population: Sioux Falls has been consistently growing over the past decade, with a population increase of more than 14% since 2010. This means that there is likely to be continued demand for housing in the city.
- Quality of life: Sioux Falls is consistently ranked as one of the best places to live in the United States, with a high quality of life, a strong sense of community, and abundant outdoor recreation opportunities.
- The Low Tax Rate: One advantage of investing in the Sioux Falls real estate market is the low tax rate, as there is no state or local income tax or state business income tax. Although the state has a slightly higher than average property tax rate of 1.2 percent, the low overall property costs in Sioux Falls result in average to below-average property tax bills. Additionally, property owners in Sioux Falls benefit from the state's lack of laws on certain issues, such as the requirement to provide receipts for deposits or record deposit withholdings, though it's recommended to do so. With no state or local income tax or state business income tax, investors can potentially save money on taxes and increase their overall return on investment.
Despite these benefits, there are also some potential drawbacks to investing in the Sioux Falls real estate market. One potential concern is the risk of overbuilding, particularly in the apartment sector. There is also the risk of a downturn in the local economy, particularly if there are major shifts in industries that drive job growth in the region.
Overall, however, Sioux Falls appears to be a promising market for real estate investors, particularly those looking for strong cash flow from rental properties in a growing and stable community. As with any investment, it's important to conduct thorough due diligence and work with local experts to make informed decisions.
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market area, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing, and interest rates.
NORADA REAL ESTATE INVESTMENTS strives to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in the U.S. growth markets. We can help you succeed by minimizing risk and maximizing profitability.
Remember, caveat emptor still applies when buying a property anywhere. Some of the information contained in this article was pulled from third-party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
Sources:
- https://www.zillow.com/sioux-falls-sd/home-values/
- https://rase-inc.org/rase-members/monthly-rase-mls-statistics/
- https://www.redfin.com/city/15282/SD/Sioux-Falls/housing-market
- https://www.realtor.com/realestateandhomes-search/Sioux-Falls_SD/overview
