It’s been an interesting first five months of 2019 for central Iowa real estate sales. In this article, I will break down sales activity in the Des Moines metro by four quadrants. Single Family Resale, Condo-Townhome Resale, Single Family New Construction and Condo-Townhome New Construction. The Des Moines metro is made up of the city of Des Moines (broken down into 7 areas: NE, NW, SE, SW, East, West and Downtown) and 15 surrounding contiguous suburbs. This geographic region is where 75% of all sales are made in our market.
Condo-Townhome New Construction
This is the smallest segment of metro sales making up just over 3% of all sales. Not surprisingly, there are only a handful of communities where many Condo-Townhomes are being built.
The leaders in this category with year-to-date closed sales are Ankeny (30), Waukee and Norwalk (21 each) and Downtown Des Moines (10). One community not on the top of the list so far this year is West Des Moines with only 9 closed sales, but the bigger news there is that last year by this time they had 17 sales putting them down by over 47% from a year ago.
Another big change to Condo-Townhome New Construction so far this year is that the majority of the communities building these properties are selling at a lower average sale price which could indicate a softening of the buyer pool for this market.
The resale side of the Condo-Townhome market accounts for 14% of sales in the Des Moines MLS so far in 2019. With 482 closed sales recorded year-to-date, we are still behind last year’s sales by 24%. Each of the four different segments of the metro market are behind last year’s numbers, mostly due to our slow start of the spring market.
Ankeny, Waukee and Van Meter (surprise!) are the leaders in closed sales so far this year with a combined total of 263 of the 482 sales. The areas where prices have risen most over last year are Norwalk (30% higher sale prices), Ankeny (10.6% higher), Waukee (8.6% higher) and West Des Moines (7% higher).
There are a couple of anomalies in this set of data. After having 15 closed sales at this time last year, Clive has only had 1 closed Condo-Townhome Resale and one of the perennial leaders, Johnston, while having 25 closed sales so far is seeing their average sale price drop from $170,000 to $152,000. I do expect both of these suburbs to catch up quickly as the year progresses. Altoona and Waukee are both experiencing sales at a record pace of 17 days on market.
Single Family New Construction
It should be no surprise that Ankeny leads the pack with 121 closed new home sales year-to-date (almost double the sales of its closest competitor, Waukee). Waukee comes in at 63 homes followed by Urbandale (49), West Des Moines (44), Norwalk (42), Bondurant (36) and Altoona (30).
Clive has the highest average sale price at just over $463,000. Ankeny’s average new home sale price is $335,000. Bondurant is making a name for itself as an affordable new home community with an average sale price of just over $273,000 and a new player in this category this year is Des Moines Northeast with 18 sales year-to-date. Some of these sales are from a couple of new developments within the city of Des Moines as well as several infill lot builds in existing neighborhoods.
The average sale price of new homes in this area year-to-date is just under $267,000 making it an affordable option for move up and potentially first-time home buyers.
One surprise that may forecast changes to come in residential new construction is the average list to sale price of all new homes sold so far is 99.7%. It may not seem like a big deal, but traditionally new construction homes close above the original list price after upgrades and add-ons. This certainly indicates that builders may be negotiating slightly on prices or offering extra buyer concessions this year after the slower start.
Single Family Resale
At 68% of the market, Single Family Resale properties are the bread and butter of the Des Moines market. Although 12% behind in year -to-date sales from last year, sellers are a welcome sight to hungry home buyers. The top area in this category is the Des Moines Northwest section of the city (think Beaverdale), with 358 closed sales year-to-date.
Ankeny comes in second at 296 and Des Moines Northeast is third. All three of these areas serve a different price point buyer from $123,000 average Sale Price in Des Moines Northeast, $151,000 in Des Moines Northwest and $279,000 in Ankeny.
Up and coming competition this year for increased sales is Grimes at 17% more homes sold in the first 5 months and a big player this year, Van Meter is seeing a 58% increase in the number of homes sold year to date over last year. The western crawl of homebuyers continues!
Every single community in this category is experiencing less days on market (45 days vs 67 days a year ago) with one exception… Windsor Heights is taking longer to sell at 50 days vs 37 days last year.
One final stat on Des Moines Northwest—in the top selling area of single-family resales, multiple offers are common. This is driving the homes in this area to sell at 10% on average higher than list price. In fact, this is the only area in the metro selling on average above list price. On the flip side, where does a home buyer have the best chance at getting a “deal” in the metro? Grimes—coming in at 94.5% of list price on average.
The Last Word
While it seems as though the Des Moines and central Iowa market is off a little from this time last year, keep in mind that home sales really just began near the end of March this year and we have also been dealing with what seems like non-stop rain storms and local flooding in April and May.
I believe that this late start will correct itself by an extended spring market into the summer months. It will be worth watching to see if the trends of fewer sales continue this year or if the market catches up as we progress to the summer months of 2019.