Des Moines Housing Market Update: 2023 Q2

Truly, this quarter, I was excited to dig into the recent home sales and try to figure out what was going on. I suspected that we had two different market trends based on price point, and I was incorrect.

We have THREE different markets going on.

First, let’s look at where we’ve been.  Some past market updates you may want to read:

Here are the trends I’m seeing from the numbers:

  • Between the first and second quarters in 2023, we had a significant jump in the numbers of homes sold. This is not quite a surprise; the second quarter is usually the crazy “spring market”.
  • However, in 2023 so far, we’re nowhere near the annual number of homes that we saw sold in 2021 or even in 2022. So, overall, the market IS slowing.
  • Prices, however, continue to rise. The average home price jumped from $290k to $317k between the first and second quarters of 2023.
  • The three types of markets are VERY clear:
    Below $350,000, we have a strong seller’s market still.
    Between $350,000 and $$800,000, we have a balanced market.
    Above $800,000, we have a strong buyer’s market.

In reviewing these trends above, the biggest surprise to me was how much the average price jumped in one quarter. If you think prices are coming down across the board, you might want to think again. The average price point probably varies among the three markets we’re seeing.

So, with all of that said, let’s dig into the “nerdy” stuff: the comparisons and numbers.

The chart below shows where we have been so far in 2023 (active and pending snapshots are as of 09-July-2023). As always, whether we have a seller’s market (less than three months of inventory available), a balanced market (three to six months of inventory available), or a buyer’s market (more than six months of inventory available) varies widely based on the price point. You can see the seller’s market, balanced market, and buyer’s market price points below.

And if you prefer a more graphical display of the difference in home sales between the first and second quarters of 2023… I got you.

What Can We Expect Through the Remainder of 2023?

Interest rates continue to be volatile, which will impact buyers. Those buyers who are determined to buy may decide to drop their target price or even put their plans on hold temporarily. Those sellers who don’t NEED to sell will probably wait. That being said, interest rates are still expected to drop in 2024-2025, so don’t lose hope that you’ll be able to refinance.

We have continued to see pending transactions fall through at a higher rate, especially in the lower price points, due to inspection, appraisal, or financing issues. Don’t forget: getting a house under contract is only the FIRST step. This will most likely continue through the rest of 2023.

Finally, because buyers feel like they are paying top dollar in the lower price points, they are being very picky with what they choose to buy. Even though we have a strong seller’s market, not all homes are being sold within 12 hours with multiple offers. Plan accordingly!

The Bottom Line

Considering a move in 2023? If you have a REALTOR®, that’s great. If you don’t, the Home Sweet Des Moines team (brokered by Realty ONE Group Impact) is ready to help. Contact us!

And even if you’re not moving, feel free to say hi. We love all our clients, past, present, and future! Here’s to an amazing quarter 3!

Licensed in the state of Iowa. Home Sweet Des Moines - Realty ONE Group Impact

* Sales prices in thousands.  This data includes all residential properties in the Multiple Listing Service (MLS) for the Des Moines Area Association of Realtors (DMAAR).  For Sale By Owner homes and lot listings may not be included.   
* Months of inventory determined by the last three months of sales numbers.

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