Why Sioux Falls Home Sales Are Down—but Prices Aren’t
July 2026 Sioux Falls Real Estate Market Update
If you have been waiting for the Sioux Falls real estate market to finally get easier, July’s numbers offer both good news and bad news.
Fewer homes sold across the Sioux Falls metro than they did one year ago. At the same time, home prices continued to rise, inventory dropped sharply, and buyers still competed for the right homes.
On the surface, those things do not seem to fit together. If sales are slowing, shouldn’t prices be falling too?
Not necessarily. The Sioux Falls market is not simply getting weaker. It is becoming more selective.
Sales Slowed, but Prices Still Increased
Across the Sioux Falls metro, 350 homes closed in July, down 7.7% from 379 during the same month last year. That is a meaningful slowdown in sales activity.
But the median sales price increased 3.0%, from $339,900 to $350,000. The average sales price also rose 3.2%, reaching $408,654.
The City of Sioux Falls followed a similar pattern. Closed sales were nearly flat, increasing just 0.7%, while the median price rose 1.6% to $340,450.
So, buyers did not suddenly disappear—and sellers did not lose all of their leverage. Instead, the market became more divided. Well-positioned homes continued to attract attention, while overpriced homes or properties with obvious drawbacks were easier for buyers to pass over.
Inventory Is the Part of the Story That Matters Most
The headline says home sales slowed. The deeper story is that inventory shrank even faster.
The Sioux Falls metro had 1,293 homes available in July, down 26.6% from 1,762 one year earlier. The available supply fell from 5.6 months to 3.7 months. Within the city itself, inventory declined 24.4%, and the available supply dropped from 5.3 months to 3.6 months.
Think of it this way: demand could fall from 100 buyers to 90, but if the number of available homes falls from 100 to 70, the remaining buyers are still competing over fewer choices. That is how sales can decline without causing prices to fall.
New listings did improve in July. They increased 7.7% across the metro and 9.6% within the city. However, one month of stronger listing activity was not enough to make up for the much larger year-over-year inventory decline.
What This Means for Buyers and Sellers
For buyers, slower sales do not automatically mean that waiting will create more negotiating power. Some homes may sit longer or offer room for negotiation, but attractive homes that are priced correctly can still move quickly. The better strategy is to understand the specific price range and neighborhood in which you are shopping—and to know your financing options before the right home appears.
For sellers, rising prices do not mean that any home will sell at any price. Buyers are paying attention to condition, location, presentation, and value. Pricing correctly from the beginning matters more in a selective market.
Move-up buyers face both sides of this market at once. They need a realistic plan for selling their current home while also competing for the next one. That may require looking at the timing, available equity, monthly payment, and financing options together before making a move.
If you are thinking about buying or selling in the Sioux Falls area, the most important market is not the national one. It is the one you are actually competing in.
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