The Des Moines Metro Market Snapshot is a quarterly report featuring inventories of new construction and existing single-family homes in the 18 communities I track for Peoples Company. My reports cover the residential housing data and statistics presented during Peoples Company’s Annual Builder & Developer Luncheon, and provide updates on the Des Moines-area market throughout the year.
Sales of single-family homes slowed a bit in August and September following a robust spring and early summer as buyers and sellers focused their attention on end-of-summer vacations, back to school preparations and seasonal pastimes such as the Iowa State Fair.
Sales of existing homes have been more attractive for some buyers this year as the average new construction sale price has continued to increase since 2010 – to $314,000 in 2013 – and may be one of the reasons why new housing permits and construction starts have pulled back, compared with last year. There have been 1,348 building permits issued throughout the Des Moines-metro area in 2014, compared with 1,629 a year ago.
The slowdown in building permits, which may be attributed to the consumer being disappointed in what they can buy in to at a particular price range, is happening in conjunction with an increase in development activity, so the shortage is behind us in most communities. Ultimately, costs either need to level off or home buyers will need to accept this as the new norm. Or a little of both.
Lot prices combined with the cost of labor, development and construction materials and labor have contributed to the push up in average prices, increasing the need and demand for new construction town homes suitable for first-time buyers who may not be prepared to spend more than $250,000 on a home in today’s market.
A booming economy and growing demand for skilled workers has helped drive up the cost of new construction and, according to Bloomberg, confidence among U.S. homebuilders rose in September to a nine-year high as borrowing costs have declined in 2014.
Active listings the Des Moines market have held steady with a total of 2,816 single-family homes active on the market, and in comparison with 2,844 at this time of year in 2013. There are a total of 674 single-family new construction homes on the market, compared with 510 new construction homes listed one year ago.
|Q3 2014||Q3 2013||Q3 2012|
|New Construction ACTIVE||674||510||450|
|New Construction PENDING||301||347||273|
|New Construction SOLD||1287||1192||998|
|Total Months Supply||5.8||4.7||5.3|
|New Construction Months Supply||9.2||4.9||4.6|
Explore the chart and visit my new website at www.newconstructionspecialistdsm.com for additional information on trends in new construction homes, or contact me to schedule a time for us to meet and discuss the brightest opportunities for builders, sellers and buyers in the current market.
Though buyers are feeling this increase in construction costs, I anticipate that both new construction sales and total sales will be only slightly lower than 2013, as the market has been holding steady and given the continuation of low interest rates it is still a great time to buy.
I am a Residential REALTOR® and Certified New Construction Sales Professional who specializes in helping homebuyers locate a suitable lot, secure a qualified builder, and pick a perfect floor plan to match their unique tastes or personal style. The ability to listen and understand the needs of her clients allows me to offer appropriate feedback and credible data that help sellers and buyers make informed decisions regarding real estate transactions. Follow me on Facebook, Twitter and LinkedIn.