As the year winds down, it’s time to forecast where the Des Moines real estate market will end up. A full accounting of 2018 will be ready by the end of January 2019, but it’s not too early to look at current trends and come to some early conclusions.
Homes For Sale Inventory
This is the most watched and talked about stat all year. Home inventory levels started the year ahead of 2017 and never looked back. The addition of more homes to sell has played a factor in home values. Common logic of Supply & Demand would make you think that with the increase in homes for sale, prices would drop as there would be more homes for buyers to choose from. But because our inventory levels have been so low, buyers snapped up homes new to the market at a faster pace. Not fast enough to move us into a Buyers’ Market.
Resale Homes and New Construction
There are really two real estate markets in Des Moines. Resale properties for sale under $300,000 and New Construction properties priced above $300,000. With new homes making up 38% of homes for sale, the bulk of the remaining sales fall under that $300,000 price point.
Even though almost 4 of 10 homes for sale are new construction, closed transactions of new homes only account for 15% of total overall sales. In effect, with the bulk of sales below $300,000, that inventory remains extremely low and that segment is what is driving the appreciation of values and keeping the overall market in a Sellers’ Market with under 4 months of inventory.
Closed Sales Prediction
The number of closed sales has risen steadily since the real estate recession of 2008. 2017 ended the year with 14,600 sales and it appears that we will again see a 14,000-sale year in 2018. National predictions are that 2019 will see higher sales due to the ever-increasing home inventory, however home values will not rise as quickly in the past.
The past three years have seen a nice rise in property values (as many of you may have noticed with higher property tax assessments this year). It’s too early to predict where the Des Moines market will end up with home value appreciations, but from all appearances, some parts of the metro will again see around a 4% increase with some Des Moines neighborhoods and various suburbs seeing a bit higher appreciation.
Days on Market
It’s become pretty common to see homes that are priced under $200,000 selling within a couple of weeks or even a few days to hours in the busiest part of the year. Year-to-date, homes under $200,000 have averaged 23 Days on Market and above $200,000, 49 Days on Market.