Folks moving to South Dakota do appear to be affecting the housing market—to the good for sellers, to the bad for buyers. According to the Dakota Institute, housing prices rose faster in South Dakota than the national average in 2022:
The South Dakota market is a prime example where median listing prices more than doubled growth rates in national housing prices throughout 2022 – even after accounting for inflation effects, listing prices in South Dakota grew 17.4% annually, compared to 5.0% on the national level. This, paired with a staggering 100% increase in mortgage rates – from record lows of 3% in Q4 2021 to nearly 7% by the end of Q4 2022 – resulted in reduced affordability rates for South Dakota homebuyers for the first time since 2018, compared to 2021 at the national level [Aaron Scholl, “As Prices Persist, Affordability Takes a Hit,” Dakota Institute, 2023.04.03].
Dakota Institute reports that South Dakota still issued a truckload of building permits in 2022. New housing construction as measure by permits issued grew 24.8% in South Dakota over 2022, while new residential building permits declined 4.9% nationwide. But the national decline came due to a 22.2% decline in the fourth quarter. In South Dakota, Q4 building permits retreated even more, 45.6%.
Dakota Institute predicts that building permits should hold almost steady nationwide this year, declining only 0.1%, but in South Dakota, the think tank projects a 25.0% decline in new housing, contributing to a further sharp decline in the ability of South Dakotans to afford homes.