Event and blog offer regular snapshots of the local market.
Twelve years ago Peoples Company and Diligent Development decided to invite a few local bankers, builders, and developers to lunch to talk about the real estate market in central Iowa. The organizers gathered information so they could provide statistics on the previous year’s activity and then dove into the unknown. Thirty people attended that year, which was a pretty good start.
This year’s luncheon hosted a packed crowd of nearly 300 people, representing mortgage lenders, builders, developers, journalists, real estate professionals, and others. And pulling together statistics for the event has grown exponentially as well. It’s an ongoing project for Peoples Company’s Kalen Ludwig.
“Our goal from the beginning with the Builder-Developer Luncheon was to provide builders and bankers with information to help them understand the local market so they could make more-informed decisions,” Ludwig says. “That hasn’t changed, even though the event itself has grown and changed.
“I represent Diligent Development and sell lots for them, so the goal when I started pulling this information together was to just have good information about the local market for our lenders and builders,” she explains.
The statistics she began compiling helped lenders and builders identify which areas were growing, what lot sizes were in demand, and the competitive prices for land.
During the first few years, those statistics focused primarily on Peoples Company projects to let interested builders and developers know what the company had in the works. Since the 2008 recession, the event has taken a broader perspective, and so has Ludwig’s blog.
On her website, NewConstructionSpecialistDSM.com, she writes quarterly updates on the Des Moines metro construction market. That information is the basis for her annual presentation at the Builder-Developer Luncheon.
“I pull the same information quarterly and use it for the blog, primarily from Multiple Listing Service (MLS) data” she says. “For the luncheon, though, the presentation is a little more in-depth. During the recession, we really got to studying the entire metro, not just our own activity, so we could evaluate the market as a whole.”
Although the information Ludwig presents is readily available to the public, gathering the data into one place and presenting it in easily readable form takes a great deal of time. “I used to do it monthly, but it’s a time-consuming process, and it didn’t seem as helpful to do it that often.” Changing trends were more evident, she adds, when she presented the information quarterly rather than monthly.
Eight or nine years ago, that data was easier to track. The rapidly changing market today recently caused Ludwig and the Diligent Development team to question the value of the quarterly blog updates.
“Peoples Company president Steve Bruere and I just had this discussion about whether the blog was valuable or not,” Ludwig says. “Sometimes it’s hard to tell with a blog whether the time you put into it is paying off for anyone. But when we talked to people about it, they told us they wait for that information. They’re using those statistics to help evaluate projects.”
The objective from the beginning was to help builders and bankers make good decisions based on current market conditions and trends. The rapidly changing data may make this seem an impossible task. But Ludwig says she’s realized that it’s actually more important than ever. “Everything is such a moving target now. Things change so quickly,” she says. “That’s clear when you look at the statistics from one quarter to the next.”
The annual Builder-Developer Luncheon offers an in-depth look at that data from one year to the next. But thanks to Ludwig’s blog, decision makers don’t have to wait until next year’s event to see where the market is headed.
For her blog, Ludwig tracks construction, sales, and lot development in 19 communities. This most recent data included Cumming for the first time. Infrastructure and development plans for Cumming indicate it will see significant growth over the next few years.
Other communities included in these statistics:
- Des Moines
- Pleasant Hill
- Polk City
- Van Meter
- West Des Moines
The Des Moines metro area continues to be a seller’s market, with less than a 3-month supply of homes available. In addition, the under $300,000 listings are the most robust segment, with resales steadily increasing in value.
New construction averages $353,000, continuing to pose a barrier for first-time and entry-level buyers, although that price dropped 2% in 2018. Metro area home sales dropped 3.6% in 2018, but not nearly as much as home sales nationally. Of active inventory, the balance between new construction and resale remained close, with new construction making up 45%.
More lots were developed in the metro area in 2018 than permits pulled, indicating that lot availability is growing stronger. The fastest growing communities for new construction continue to be Ankeny and Waukee. For the first time, Waukee will be the site of the HomeShowExpo.