There is no doubt that the real estate market in Des Moines has been on fire during the first quarter of 2015. Overall, Des Moines REALTORS® have closed over 2,000 home sales since January 1st, a pace that is 16% ahead of last year.
But are all sellers seeing this frenzy of activity?
A quick analysis of home sale prices show that 86% of homes closed this year were listed under $300,000. Currently, that price range has just over 2 month’s supply of inventory. Contrast that with homes priced over $300,000 and inventory jumps to over 5.1 months of supply, which means that the upper price range is taking almost 2½ times longer to sell. Before anyone starts to scream that the sky is falling, this is typical as the buyer pool for upper priced homes is more limited at any given time.
What really makes it feel different this year is that homebuyers came out earlier, most likely because of a strengthening economy, low mortgage interest rates and milder winter weather.
Home sellers on the other hand have been slow to react. Perhaps because the thought of putting their home up for sale before spring or possibly the fear of not finding their next home due to such a low home inventory.
Builders are taking the cue from the buyers this year by focusing primarily on the mid to upper price ranges. 2 out of 10 homes for sale under $300,000 are new. Once you move above the $300,000 price point, almost half of the homes for sale are proposed or new construction.
Now that spring has arrived and as we move towards warmer weather and the end of the school year, I predict that the number of homes on the market will begin to increase, in particular the price range between $150,000 and $300,000. Activity will remain high throughout the 2nd quarter of 2015 as more buyers enter the market.