Real Estate in Des Moines: A Tale of THREE Markets
Truly, this quarter, I was excited to dig into the recent home sales and try to figure out what was going on. I suspected that we had two different market trends based on price point, and I was incorrect.
We have THREE different markets going on.
First, let’s look at where we’ve been. Some past market updates you may want to read:
● 1st Quarter of 2023
● 2022 Year in Review
Here are the trends I’m seeing from the numbers:
● Between the first and second quarters in 2023, we had a significant jump in the numbers of
homes sold. This is not quite a surprise; the second quarter is usually the crazy “spring market”.
● However, in 2023 so far, we’re nowhere near the annual number of homes that we saw sold in
2021 or even in 2022. So, overall, the market IS slowing.
● Prices, however, continue to rise. The average home price jumped from $290k to $317k
between the first and second quarters of 2023.
● The three types of markets are VERY clear:
o Below $$350,000, we have a strong seller’s market still.
o Between $350,000 and $$800,000, we have a balanced market.
o Above $800,000, we have a strong buyer’s market.
In reviewing these trends above, the biggest surprise to me was how much the average price jumped in one quarter. If you think prices are coming down across the board, you might want to think again. The average price point probably varies among the three markets we’re seeing.
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 09-July-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.
And if you prefer a more graphical display of the difference in home sales between the first and second quarters of 2023… I got you.
What Can We Expect Through the Remainder of 2023?
Interest rates continue to be volatile, which will impact buyers. Those buyers who are determined to buy may decide to drop their target price or even put their plans on hold temporarily. Those sellers who don’t NEED to sell will probably wait. That being said, interest rates are still expected to drop in 2024-2025, so don’t lose hope that you’ll be able to refinance.
We have continued to see pending transactions fall through at a higher rate, especially in the lower price points, due to inspection, appraisal, or financing issues. Don’t forget: getting a house under contract is only the FIRST step. This will most likely continue through the rest of 2023.
Finally, because buyers feel like they are paying top dollar in the lower price points, they are being very picky with what they choose to buy. Even though we have a strong seller’s market, not all homes are being sold within 12 hours with multiple offers. Plan accordingly!
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!
● Depending on the price point in which you want to buy, you may need to be ready to jump into showings ASAP.
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!
Depending on your price point, let’s work together to set expectations for while your home is on the market, and how fast we expect it to sell.
The Bottom Line
If you are pondering moving, 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:
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!
Here’s to an amazing quarter 3!
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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.