Looking back beyond the last 3 or 4 years, the Des Moines real estate market appears to be acting more normal this year. Spring home buying activity actually started in late March vs January as it has done the last couple of years. Throw in some abnormal extreme heat in May, a very wet June with flooding—which will now be referred to as “the flood of 18” on Sellers Property Disclosures—and then the aftermath of the tornado damage locally in Bondurant as well as outside of our market in Marshalltown and Pella.
Flooding & Tornados
The question I am frequently asked is “have the recent weather events caused any disruption to the local real estate market this year?” Iowan’s are pretty resilient when it comes to Mother Nature and while there were homes destroyed by the flood and tornados, very few of the For Sale or Pending properties experienced damage. Some homes in the MLS experienced wet basements, downed tree limbs, etc., but the numbers were fairly low primarily because we continue to have extremely low inventory levels of homes for sale. So, my general answer is that there has not been a huge disruption in local real estate sales.
Checking in on July’s Numbers
Our real estate market is really divided up into four segments. Single-family, Condo/Townhome, New Construction and Resale (Existing Homes). This month I’ve broken down each of these four market segments looking at listing inventory as well as year-to-date sales. (As of July 24th, 2018.)
- Single-family Resale
- Single-family resale properties make-up 57% of all homes for sale with a Median List Price of $269,000.
- 5,654 homes have Sold year-to-date with a Median Sale Price of $187,000.
- Single-family New Construction
- New construction single-family homes for sale account for 29% of all inventory and a Median List Price of $334,900.
- 1,032 homes have closed year-to-date with a Median Sale Price of $320,322.
- Condo/Townhome Resale
- Resale condo/townhomes for sale represents 7% of all homes for sale in the MLS and a Median List Price of $180,950.
- 1,003 homes sold year-to-date with a Median Sale Price of $148,000.
- Condo/Townhome New Construction
- The Condo/Townhome new construction properties for sale brings up the remaining 7% with a Median List Price of $256,300.
- 244 of these homes have closed year-to-date with a Median Sale Price of $244,000.
Pending Sales Answer
The Pending Sales count stat has puzzled me every month this year. I have been trying to understand how Pending Sales can continually be behind last year when closed transactions are running neck and neck with 2017. I reached out to several mortgage lenders asking them a simple question. “Are homes going from offer acceptance to closing quicker this year than in the past couple of years?” Their answers confirmed my suspicion. A typical home sale is closing consistently in the 25- to 30-day time frame compared to 30 to 35 days last year.
What changed? Remember TRID? “TILA/RESPA Integrated Disclosure Rule”. It officially went into effect late 2015 and after a few revisions, it was fully implemented in 2016 and 2017. At that time, Realtors were being told to plan on 45 day closing periods. The majority of mortgage lenders I spoke with confirmed that the early delays that TRID caused were gone and mortgage lenders have perfected their closing process to comply with TRID. As a result, 2018 has seen the benefit of faster closings. What appeared to be a downturn in Pending Sales was actually homes staying in Pending status a shorter time. Mystery solved!