Sioux Falls, SD Housing Market Report

The Sioux Falls housing market entering December 2025 remains characterized by steady, incremental growth and a persistent shortage of available inventory. With a median home value of $322,725, the market has seen a modest year-over-year increase of 1.13%. While the pace of appreciation has stabilized compared to the rapid spikes seen in previous years, the 2.04% decline in active inventory suggests that supply constraints continue to provide a floor for property values. Currently, the market slightly favors sellers due to this limited supply, though the average of 66 days on market indicates that buyers have more breathing room to conduct inspections and negotiate than they did during the post-pandemic frenzy.

Price trends over the last six months show a remarkably consistent upward trajectory. Starting at $320,085 in July, values have climbed every single month to reach the current December peak. This steady climb, even during the typically slower autumn and winter months, signals robust local demand driven by South Dakota's favorable tax climate and the sustained economic growth of the Sioux Falls metro area. The rental market mirrors this stability, with a median rent of $1,227 showing a negligible 0.22% increase, suggesting that while the purchase market is tightening, the rental sector has reached a point of equilibrium.

Looking ahead, the Sioux Falls market appears poised for continued stability rather than volatility. For potential sellers, the low inventory environment means well-maintained properties in desirable school districts will likely attract serious interest, though the 66-day average time on market requires patience. For buyers, the slow rate of appreciation is actually a positive sign, as it suggests the market is not in a bubble but is instead reflecting genuine local economic conditions. Prospective homeowners should focus on securing financing early, as the consistent monthly price increases suggest that waiting for a significant market correction may result in higher entry costs in the long run.