Des Moines Housing Market Update: 2023 Q3

Inventory is coming back!

Like most locations around the country, we’ve seen some volatility in the housing market here in Des Moines. And, we finally have a glimmer of good news: available inventory is coming back!

Some past market updates you may want to read first:
2nd Quarter of 2023
1st Quarter of 2023
2022 Year in Review

The Trends

  • Inventory is finally coming back! We have over 3,100 homes for sale, as opposed to almost 2,800 homes for sale at the end of the second quarter.
  • In Q2 and Q3 of 2023, the number of homes sold was virtually flat. Some price points showed a slight decrease, while others showed a slight increase.
  • 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. If the trend continues, we’ll see around 13,000 homes sold in 2023, vs 15,000 – 17,000.
  • Prices, however, continue to rise. The average home price inched upwards from $317k to $320k between the second and third quarters of 2023.
  • We still have three different markets:
    Below $350,000, we have a strong seller’s market still.
    Between $350,000 and $1,000,000, we have a balanced market.
    Above $1,000,000, we have a strong buyer’s market.

The Nerdy Stuff

For those of you who prefer a graphical representation, take a look at the two data points on which I focused this month:

Sales by Quarter in 2023

Active Inventory by Quarter in 2023

So … what am I seeing? First, in almost EVERY price point, we have more active inventory at the end of Q3 than we had at the end of Q2. And, boy, is it about time. Second, sales are MUCH slower in 2023 than in 2022 or 2021, which is what we expected.

The Numbers Behind the Graphs

The chart below shows where we have been so far in 2023 (active and pending snapshots are as of 10-Oct-2023). As always, whether we have a seller’s market, a balanced market, or a buyer’s market varies widely based on the price point.  You can see the seller’s market, balanced market, and buyer’s market price points below.

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? 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! We’d love to help.

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

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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