Please… Tell me this housing market is calming down?
So far in the first quarter of 2022, we’ve had more of the same trends from 2020 and 2021, but more so:
- Prices continue to go up
- Not enough sales inventory
- Desperate buyers being outbid, sellers having their pick of offers
- New construction costs and timeframes rising
- More and more sales don’t make it to the closing table due to buyer’s remorse, failure to reach an agreement on inspection, and buyer financing falling through
Basically, this market is NOT for the faint of heart!
Overall, to get into a home that is ready for the market and priced well, especially a resale home, you had to have a REALTOR® who was turning over bushes looking for pre-market sales (shameless plug: we do that, by the way).
And the home sales show this from the first quarter of 2022. In the 1st quarter of 2021, 3,056 homes sold. In the 1st quarter of this year, 3,214 homes sold. And you can see in the graph below how the prices continue to rise.
So, now where are we in terms of available inventory? The short answer: We don’t have enough housing for sale in the $350,000 price point and lower. There are two main reasons for this:
- Homeowners in the lower price points are waiting to list their homes until they find something to buy in a higher price point, depriving the market of inventory.
- New construction has edged up above that magical $350,000 price point in several areas.
The chart below shows where we have been so far in 2022 (active and pending snapshots are as of 06-April-2022). 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’s Coming Up?
We’ve had a few changes since the beginning of 2022 as well. The key change is that interest rates have jumped from ~3% to ~5%. While these rates are still historically low, the rate increases are changing the price point in which people can afford to buy a home. If you want to read more from the lender’s point of view, check out our March post Ask the Lenders.
Anecdotally, we are also seeing changes in buyer behavior. Because buyers have seen several straight years of price increases, they are becoming more skittish when it comes to making an offer. They have the fear of missing out, but now they also want to make sure that the house they are buying is worth the premium price they are paying for it. In addition, first-time homebuyers typically can be flexible in their timeframe (especially if they are renting month-to-month) and wait for the “right house”.
Even though we have about half the inventory we normally have at this time of year, houses that are priced too high and/or not fully prepared for sale will still sit on the market.
Two quick notes:
- Some of our observations are anecdotal, not based on the numbers. We’ll let you know if that’s the case.
- February 2022’s blog post will get opinions from our favorite lenders. They often have a different view of the same market… you won’t want to miss it!
If you’re considering buying a home in the next couple of years… 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 are all networking and trying to get buyers into homes before they hit the broader 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.
Yes, please! If you have a home you want to sell, please, please, get it on the market! Again, meet with the REALTOR® of your choice (hey, we’re here!), and get moving. We would love to have more options for our buyers.
The Bottom Line
If you think 2022 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 RE/MAX Precision) is ready to help. Here’s how to contact us:
- Jeannie Crosby: email@example.com, 636-288-1761
- Nora Crosthwaite: firstname.lastname@example.org, 515-783-9815
- Tawnia Martin: email@example.com, 515-867-4436
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!
Cheers to 2022!
Licensed in the state of Iowa
Home Sweet Des Moines – RE/MAX Precision
* 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.