Housing markets taking a breather | fedgazette March 2009 | Federal Reserve Bank of Minneapolis
After showing remarkable buoyancy, the South Dakota housing market is following the national market's general path downward, though at a less-steep grade.
After a boom through 2006, year-to-date figures for housing permits through November 2008 show a considerable drop in total permits for each of the past two years, with a total two-year drop statewide of 30 percent. The housing increase was largely driven by Sioux Falls, Rapid City and surrounding communities, and the slowdown is similarly rooted. Total permits through November of last year, for example, dropped almost 50 percent in Rapid City, according to U.S. Census figures. Local newspaper reports in Sioux Falls cite a 43 percent annual decline for new single-family homes for 2008, as well as a decline in permits in neighboring suburbs, particularly in Brandon.
Still, South Dakota is a long way from California and Florida, both literally and figuratively, when it comes to housing markets. Average home prices in South Dakota rose by 3.6 percent last year—second best in the country behind West Virginia, according to estimates by First American CoreLogic. The state also had the third-lowest foreclosure rate in the nation, according to RealtyTrac.
—Ronald A. Wirtz