Small City, Big Jump – Sioux Falls Climbs 131 Spots In The Nation's Hottest Housing Markets

While some U.S. cities maintain their long-standing appeal to homebuyers, others are emerging as surprising contenders – and Sioux Falls, South Dakota, is leading the charge.

The city of 200,000 made a remarkable leap on Realtor.com's September 2024 Hottest Housing Markets list, climbing 131 spots from last year. Previously near the bottom among the 300 largest metros, it now sits squarely in the middle.

"This is a warm market that is heating up compared to last month and heating up compared to last year," Realtor.com senior economic analyst Hannah Jones said.

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Realtor.com determined market hotness by analyzing two key factors: the number of unique views on its website and the average number of days a listing stays active before being sold.

In Sioux Falls, homes spend an average of 39 days on the market – 14 days faster than the national average. The pace of home sales in the city is also moving 11% faster compared to last year.

What's driving Sioux Falls' rising appeal? According to Jones, the city's median home price of $358,000 plays a significant role – $67,000 below the U.S. median list price of $425,000.

Along with affordable housing, Sioux Falls' strong job market, featuring major employers like Sanford Health and Wells Fargo, has attracted growing interest from homebuyers.

"Coupled with a relatively affordable housing market compared to the national average, it's becoming an attractive option for first-time homebuyers and investors," Kwame Buys Houses CEO Kwame Darko told Realtor.com.

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"Additionally, 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," Darko said. "It's a city that offers growth potential without sacrificing its charm."

Other cities gaining in popularity include Bloomington, Illinois, which jumped 112 spots and Poughkeepsie, New York, climbing 89 spots.

A common factor driving the rise of these emerging markets is their affordable home prices, significantly below the national average. Bloomington, for example, has a median home list price of $295,000, offering buyers a potential savings of $130,000 compared to a typically priced home in the U.S.

Other emerging markets that made it into September’s top 20 Hottest Markets include Boston, Norwich, Connecticut, Rochester, New York and Peoria, Illinois. Meanwhile, Manchester, New Hampshire, holds its spot at the top of the list for the second consecutive month.

"Affordable markets in the Northeast and Midwest continue to shine as buyers look for areas where they can afford more for less," Jones said. "The metros that have heated up the most are all smaller towns that likely attract attention from buyers because prices are still reasonable, allowing shoppers to achieve homeownership in a challenging housing market. These areas offer the charm of small-town living without sacrificing access to jobs and amenities."

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