Sioux Falls leads rise in popular affordable housing markets

Certain cities in the United States are experiencing a surge in popularity among homebuyers, with Sioux Falls, South Dakota leading the trend. According to Realtor.com's September 2024 Hottest Housing Markets report, Sioux Falls has climbed 131 spots from last year, moving to the middle of rankings for the country's 300 largest metros.

“This is a ‘warm’ market that is ‘heating up’ compared to last month, and ‘heating up’ compared to last year,” says Realtor.com senior economic analyst Hannah Jones.

Realtor.com determines market hotness by analyzing demand based on unique views on their website and the number of days listings remain active. Homes in Sioux Falls spend an average of 39 days on the market, which is faster than the national average. The pace of home sales has increased by 11% compared to last year.

The median home price in Sioux Falls is $358,000, significantly lower than the U.S. median list price of $425,000. This affordability, combined with a strong job market led by major employers like Sanford Health and Wells Fargo, has attracted interest from both first-time buyers and investors.

“Coupled with a relatively affordable housing market compared to the national average, it’s becoming an attractive option for both first-time homebuyers and investors,” says Kwame Darko, CEO of Kwame Buys Houses.

Darko adds that "the city’s emphasis on developing community spaces, improving infrastructure, and increasing outdoor recreation opportunities has created a desirable quality of life that’s appealing to a wide range of people."

Other cities gaining popularity include Bloomington, Illinois (up 112 spots), and Poughkeepsie, New York (up 89 spots). These markets have median home prices below the national average. Bloomington's median list price is $295,000—offering potential savings for buyers over typically priced homes.

“Affordable markets in the Northeast and Midwest continue to shine as buyers look for areas where they can afford more for less,” says Jones.”The metros that have ‘heated up’ the most are all smaller towns that likely attract attention from buyers because prices are still reasonable.”

Additional cities making significant gains include Boston; Norwich, Connecticut; Rochester, New York; Peoria; Illinois; while Manchester remains at the top for nine consecutive months.