Are Foreclosures Rising in Spearfish, South Dakota? | Market Update

I just had a client tell me that another Realtor told them that foreclosures are on the rise in Spearfish. WRONG!

From what I am seeing in the Spearfish real estate market, I do not believe we are seeing a meaningful rise in residential foreclosures.

South Dakota continues to have one of the lowest foreclosure rates in the country, and locally, foreclosure activity remains very limited.

What we are seeing is something different: more pressure on sellers.

The Spearfish Market Has Changed

Using actual Spearfish residential MLS data through September 2026, the market looks very different than it did a few years ago.

In 2022, the median successfully sold home spent about 9 cumulative days on the market and sold for approximately 99.3% of its original asking price.

So far in 2026:

• Median cumulative days on market is about 34 days
• Median sale price is approximately 95.5% of original asking price
• About 45% of resolved listings have had a price reduction
• Approximately 31% of resolved listing attempts have expired or been withdrawn rather than sold

Those numbers show increased seller pressure, but they do not point to a foreclosure crisis.

Seller Pressure Is Not the Same as Financial Distress

A homeowner going through foreclosure is generally dealing with a serious financial problem.

A homeowner who reduces their asking price or withdraws a listing may simply be responding to changing market conditions.

That distinction is important.

Spearfish homes are still selling, but buyers are more selective, pricing matters more, and sellers generally have less negotiating power than they did in 2021 or 2022.

Price Range Matters

Not every segment of the Spearfish housing market is behaving the same way.

The $350,000 to $500,000 range remains one of the stronger parts of the market.

As prices move above $750,000, homes generally take longer to sell.

The biggest challenge is currently in the $1 million-plus market, where the buyer pool is much smaller and unsuccessful listing attempts are more common.

That does not mean luxury homes cannot sell. It means proper pricing, presentation, marketing, and patience become much more important.

Why I Don’t Expect a Foreclosure Wave

One major reason is homeowner equity.

Many property owners in Spearfish and the Northern Black Hills purchased years ago and have built substantial equity.

If they experience financial difficulty, they may still have the ability to sell conventionally rather than lose the property to foreclosure.

The group I would watch more closely is homeowners who purchased during the past few years with smaller down payments.

Those owners may have less usable equity after selling expenses, even if their property has held its value.

That can create financial pressure, but it still does not automatically lead to foreclosure.

My View of the Spearfish Real Estate Market

At this point, I would describe the local housing market as having:

Low foreclosure and financial distress

but

Moderate seller pressure

Homes are taking longer to sell. Price reductions are more common. Buyers have more negotiating power.

But that is very different from a collapsing housing market.

For sellers, the lesson is simple: pricing correctly from the beginning, understanding your competition, and adjusting when the market gives you feedback are more important today than they were a few years ago.

If you are considering buying or selling real estate in Spearfish or the Northern Black Hills and would like to understand how these trends apply to your property, I would be happy to visit with you.

Jason Tysdal
Broker/Owner
CENTURY 21 Spearfish Realty
605-642-4607