Finally, real estate is slowing down, just a smidge!
If you’ve been looking for a home this spring, you may not feel like real estate has slowed down at all, especially if you want a house priced $300,000 or less.
But the real estate market, specifically in Des Moines, is starting to show signs of softening.
First, let’s look at where we’ve been. Some past market updates you may want to read:
Here are the trends I’m seeing from the numbers:
- 2021 had the MOST home sales in recent memory. The end of 2022 was a bit slower due to rising interest rates.
- In 2023 so far, we’re starting to see a more “normal” number of homes sold. The first quarter in 2022 saw many more home sales than the first quarter now in 2023. This is not surprising; interest rates really started to rise in the middle of last year.
- We still have a lack of inventory in the lower price points, about $300,000 and above. In that price point, multiple offers and sales well above list price are still very common.
- Once you get above the $400,000 mark, you see more of a buyer’s market.
- The average price on sold properties has finally dipped, ever so slightly, after being on a tear the past few years.
All of these trends are not surprising at all, for the following reasons:
- With higher interest rates, prices tend to come down.
- Homeowners who don’t HAVE to move and have a phenomenal interest rate are choosing to stay put.
- Renters who have seen their rents go up dramatically are still entering the first-time homebuyer market in droves… and having very few choices.
So, with all of that said, let’s dig into the “nerdy” stuff: the comparisons and numbers.
The chart below shows where we have been so far in 2023 (active and pending snapshots are as of 06-April-2023). As always, whether we have a seller’s market (less than three months of inventory available), a balanced market (three to six months of inventory available), or a buyer’s market (more than six months of inventory available) varies widely based on the price point. You can see the seller’s market, balanced market, and buyer’s market price points below.
What is Coming in 2023?
In the last week or so, we’ve actually seen interest rates inch down, some below even 6%. This is great news for buyers who haven’t yet found their next home, as long as rates don’t jump back up again. However, it may also strain our current inventory further.
We’ve already seen pending transactions fall through at a higher rate, either due to inspection issues, appraisal issues, or financing issues. With some uncertainty in the job market through 2023, and multiple offers on homes under $300,000, I expect some of this to continue in 2023.
Anecdotally, I can tell you that while some houses DO sell within 24-48 hours of hitting the market, many do not. This is because buyers are still being very picky with the homes they purchase. If they are paying top dollar, and getting a mortgage with a higher interest rate, they don’t want to purchase a home that doesn’t meet ALL of their needs, most of their wants, and knock their socks off.
If you’re considering buying a home in 2023 … here’s what you need to know:
- You must be pre-approved before looking at homes. I can’t emphasize this enough; with rates going up, we need to have a fantastic idea of your price range before viewing a single home.
- You really need a REALTOR® to help you buy. We have the most up-to-date access to listings and often hear about upcoming listings before they hit the market. Use our relationships to your advantage!
- This will be a more emotional process than in the past. That’s OK – we’re here to walk you through it.
And if this describes you, and you decide to jump in… be prepared. Meet with the REALTOR® of your choice (preferably us, of course!), get on an automated search on the Multiple Listing Service, and be flexible with your schedule so you can see houses right away.
We’d love to help you sell! Let’s work together to prepare your home, price it well, and photograph and market it throughout the metro. We want you to be one of those homes that goes QUICKLY!
The Bottom Line
If you think 2023 is the year for you to move, contact us! We are happy to meet for a coffee and chat.
Considering a move? If you have a REALTOR®, that’s great. If you don’t, the Home Sweet Des Moines team (brokered by Realty ONE Group Impact) is ready to help. Here’s how to contact us:
- Nora Crosthwaite: [email protected], 515-783-9815
- Tawnia Martin: [email protected], 515-867-4436
- Jessica Shanley: [email protected], 515-707-5750
We’d love to help.
And even if you’re not moving, feel free to say hi. We love all our clients, past, present, and future!
Have a fabulous spring and summer!
Licensed in the state of Iowa
Home Sweet Des Moines – Realty ONE Group Impact
* Sales prices in thousands. This data includes all residential properties in the Multiple Listing Service (MLS) for the Des Moines Area Association of Realtors (DMAAR). For Sale By Owner homes and lot listings may not be included.
** Seller’s markets are those with 0-3 months of inventory. Balanced markets are those with 3-6 months of inventory. Buyer’s markets are those with 6+ months of inventory.
*** Months of inventory determined by the last three months of sales numbers.