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A Look Back at 2024

By admin_leng | Published January 21, 2025

It’s been quite a year, with major events shaping the economy, housing market, and everyday life. Inflation and interest rates remained hot topics, impacting everything from mortgages to new construction costs. The real estate market saw a shift as affordability challenges persisted, while labor shortages and supply chain disruptions still exist, things have improved on that front for builders. On a global scale, geopolitical tensions, technological advancements, and climate concerns influenced markets and policies. As we step into a new year, it’s worth reflecting on how these changes have shaped the housing industry—especially here in the Des Moines metro.

Inventory Trends: A Balancing Act

Active Inventory

Active inventory in the Des Moines metro area has increased compared to last year but has declined since Q3 2024. Currently, there are 2,037 single-family homes on the market, up from 1,684 a year ago. However, this is a drop from the 2,277 active homes recorded at the end of October, when supply stood at 3.6 months. Today, the metro’s months’ supply sits at 3.1.

For context, the national combined months’ supply for both new and existing single-family homes was approximately 4.2 months as of November 2024, according to the U.S. Department of Housing and Urban Development. This means the Des Moines metro continues to have a tighter supply than the national average.

Looking at the end of Q4 over the last six years, the Des Moines metro housing market has experienced significant shifts in inventory levels and the share of new construction (NC) homes. Total active inventory peaked at 2,190 homes in Q4 2018, then dropped sharply during the pandemic to just 1,179 homes in Q4 2021 before gradually rebounding to 2,037 homes in Q4 2024. Meanwhile, new construction has fluctuated, hitting a low of 629 NC homes in Q4 2020 but climbing back to 946 NC homes in Q4 2024.

One notable trend is the changing proportion of new construction in the market. In Q4 2021, NC homes made up a striking 68% of total inventory, reflecting a period when resale homes were in extremely short supply. However, this percentage has steadily declined, now standing at 46% in Q4 2024, signaling a return to a more balanced mix of resale and new homes. This shift suggests that while new construction remains a crucial part of the market, resale inventory has increased, giving buyers more options outside of new builds.

Pending Sales

The total number of single-family homes currently pending at 886 is a significant indicator of market activity, showing growth compared to previous years. At the end of Q4 last year (2023), there were 833 homes under contract, and at the same point in 2022, there were 757 pending homes.

This upward trend suggests increasing buyer demand or confidence in the housing market, even as interest rates and economic conditions evolve. The steady growth over the past two years may reflect strong interest in the Des Moines metro area and its surrounding communities, aligning with factors like affordability compared to national housing prices, family-friendly amenities, and quality of life.

The new construction (NC) market is showing promising growth, with 315 new homes currently pending compared to 285 at the same time last year. This increase highlights a positive trajectory in the demand for new construction homes, driven by buyers prioritizing modern features, energy efficiency, and the ability to customize their living spaces.

Personally, I am seeing strong custom and build-to-order (BTO) leads, with many buyers expressing a desire to customize their homes. If they are going to leave their current 3% interest rates, they want to ensure their next home meets their specific needs and preferences. This trend underscores the importance of offering flexible design options and high-quality finishes, as buyers are willing to make the move for a home that fits their vision.

Sold Data

The 2024 data reflects a notable shift in the housing market, with 7,877 single-family homes sold compared to 7,718 in 2023. While this is still below the 2022 total of 9,379, the slight rebound suggests that we may have seen the market’s bottom in 2023, signaling a small but positive sign of recovery.

One of the key highlights is the increasing share of new construction (NC) sales, which accounted for 24% of total sales in 2024 (1,894 NC homes sold), compared to 22% in both 2023 and 2022. This consistent growth in NC sales emphasizes the demand for new, customizable homes as buyers prioritize quality and tailored options when considering a move, especially given current higher interest rates. 

However, it’s important to note that the higher percentage of new homes sold in recent years is likely influenced by a higher percentage of active new construction inventory compared to previous years. With a relatively larger supply of new homes available on the market, buyers are naturally drawn to the modern features and benefits of new builds. This increase in inventory has helped new construction homes capture a larger share of total sales.

The trend since 2020, where NC homes consistently accounted for over 20% of total sales, underscores the importance of the new construction sector in stabilizing the housing market.

The average sales price of a new construction home in 2024 was $448,682, with an average size of 1,677 above grade square feet. This reflects only a slight increase from 2023, where the average price was $446,881. After experiencing a 9% increase in 2021 and a significant 16% jump in 2022, 2024 appears to mark a stabilization in new construction home pricing.

Looking Ahead to 2025

Looking ahead to 2025, interest rates and inflation will continue to play a major role in shaping the housing market. While the Federal Reserve has signaled potential rate cuts, the timing and extent remain uncertain, meaning mortgage rates could stay elevated compared to pre-pandemic levels. If inflation eases further, borrowing costs may gradually decline, improving affordability and boosting buyer confidence. However, if economic volatility persists, homebuyers and builders alike may face continued challenges. In the new construction sector, material and labor costs will be key factors, as builders navigate pricing pressures while meeting demand. Ultimately, many signs point to 2025 bringing a more balanced market, but much will depend on broader economic trends and policy decisions.

Check out full stats for a breakdown of each community I track here.

Don’t Miss the Builder & Developer Luncheon

For an in-depth analysis of the Des Moines metro housing lot inventory and new construction market, join us on March 11th from 11:00 AM to 1:00 PM at the 18th Annual Builder & Developer Luncheon. Hear from experts, including:

  • Elliot Eisenberg, Chief Economist, GraphsandLaughs – ‘Economic Trends Shaping Housing and Construction’
  • Steve Bruere, Diligent Development, and Jim MacRae, Design Workshop – ‘Designing the Future: Unique Land Planning and Development, Including Middlebrook Agrihood’
  • Kalen Ludwig, Director of Sales and Marketing, Diligent Development – ‘Local Housing Trends, New Construction, and Development Insights’

RSVP today to stay informed about the trends shaping our market.

As we brace against the current cold, remember that warmer days—and a warming housing market—are just around the corner.

 

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Des Moines Real Estate Market in 2025: Stabilizing Rates and Increased Inventory Offer Renewed Hope for Buyers

By admin_leng | Published October 21, 2024

As we approach the end of 2024, the real estate market remains subject to constant change, much like the unpredictable weather. However, there’s some good news on the horizon. After a year of challenges, stabilizing interest rates offer a glimmer of hope for 2025. Although the market is still finding its balance, we’re beginning to see improvement, especially for buyers who have been hesitant due to higher rates and limited inventory.     The Des Moines real estate market is showing signs of stabilization, yet hurdles still exist. Inventory is steadily increasing, providing more options for buyers, though a significant portion is dominated by new construction. Slowly but surely, resale homes are making their way back to the market, offering […]

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The Olympic Challenge: Navigating the Real Estate Market in 2024

By admin_leng | Published July 26, 2024

As the world gears up for the Olympics, an event that epitomizes endurance, strategy, and adaptability, we recognize similar themes playing out in the real estate market today. Much like athletes training to anticipate and conquer obstacles, players in the real estate industry — builders, developers, bankers, and industry leaders — must stay astute and agile to thrive in a constantly evolving landscape. Trends and Indicators The real estate market is more than just properties bought and sold; it’s a barometer of economic health, measuring consumer confidence, financial stability, and technological innovations. This blog aims to provide a comprehensive view of the current real estate market, with a focus on both national trends and our local scene. In today’s market, […]

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2024: Navigating the Real Estate Party – Should You Arrive Early or Fashionably Late?

By admin_leng | Published March 04, 2024

As quarter one of 2024 comes to an end, one may think to themselves, “How am I able to successfully navigate this year, this party that is to be 2024? Should I come early and be the first person there? Do I show up fashionably late and miss the beginning?”. Maximizing opportunity, both in fun and in business, is what it is all about! In the world of builders and developers, no one wants to miss out … ever. The overall feeling of 2024, thus far, is that uncertainty in the short term is overwhelming. The industry feels confident in what the long term housing market will bring; it is the short term that has us questioning ourselves. We need […]

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Q4 2023: Goodbye Uncertainty, Hello Stability

By admin_leng | Published January 17, 2024

Say GOODBYE to the uncertainty that was 2023 and HELLO to the stability 2024 should bring! In the real estate industry, the fourth quarter months of 2023 ended with interest rates finally settling into a more predictable pattern. Housing market trends in 2023 were incredibly hard to predict – making planning very hard to do. As we close the door on yet another year, the environment feels as though things are shifting in our favor! Historically high interest rates of 2023 averted buyers. However, mortgage demand rose after interest rates lowered in the months of November and December. This end of year ease of interest rates and inflation should bring house hunters back in 2024. Baby boomers wanting to downsize […]

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Market Rebalancing: A Look at Q3 2023 and What to Expect in Q4

By admin_leng | Published October 25, 2023

MARKET CLEANUP IS HAPPENING The third quarter of 2023 finished very much as predicted. The housing market continues to rebalance. Overall, 2023 has consistently shown us that supply, demand, buyers, sellers, mortgage rates (and builders themselves) are positioning themselves in a way that is sustainable in our current economy.  As stated in our February blog, the market is cleaning itself up. Third quarter of this year trended on par with expectations. Q3 ended by showing total inventory available at just a slight increase, at a 2.8 month supply. ACTIVE INVENTORY Inventory movement on the market is creeping upward compared to the pandemic years. But total inventory remains significantly lower than 2017-2019 (the most recent “normal” years we have seen). Also, […]

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Real Estate Market Rollercoaster: Navigating the Battle of Supply and Demand in Q2 2023

By admin_leng | Published July 18, 2023

The real estate market has always been a rollercoaster of ups and downs, with supply and demand dictating the pace. As we wrap up the second quarter of 2023, it’s time to take a closer look at the current state of the market, particularly in terms of single-family homes and new construction. We’ll explore the latest inventory numbers, pending sales, and the overall market trend. So, hold on tight as we delve into the battle of supply and demand in the real estate market. At the end of Q1 2023, the total inventory of single-family homes on the market stood at 1,457. As expected, this number has increased to 1,605 single-family homes in Q2 2023. This surge can be attributed […]

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Q1 2023: THE MARKET REBALANCE IS UPON US

By admin_leng | Published February 28, 2023

We all knew it. The time would eventually come when the imaginary housing market reset button was pressed and the market itself rebalanced. It was bound to happen and we are now living through it. 2023 will be a clean up year. Supply, demand, buyers, sellers, mortgage rates, builders and more will strive to balance themselves in a way that is sustainable in our growing economy. Certain price points and communities have more supply than demand right now.  2023 will bring the clean up of new construction spec homes. A spec(ulative) home is one built on the idea it will easily sell for a profit. This might not be the case this year. Fundamentally, there are more new construction spec […]

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2022: A YEAR OF UPS AND DOWNS

By admin_leng | Published January 20, 2023

We can all agree. The past few years have been crazy for our industry. 2022 started strong, but we could feel the market beginning to cool by the end of the second quarter; a feeling that continued into Q3 and Q4. Many, many factors have been driving the real estate ups and downs as of late. The loudest of which has been the fluctuation of interest rates. The volatile rate environment in the latter half of 2022 does seem to be stabilizing and industry optimists are hopeful buyers will return. The Federal Reserve may even be prepared to help, by slowing the uptick in interest rates as they see inflation numbers declining. Other promising factors are at play as well. […]

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Change is in the air: Q3 2022 Housing Snapshot

By admin_leng | Published October 19, 2022

Change is in the air for buyers, sellers, builders, developers, lenders, and others in our industry! Everyone, everywhere is trying to adapt to a housing market that is very different from what we experienced just last quarter. The strong buyer pool we have experienced the last few years has cooled with higher interest rates. This does give our marketplace a chance to tie up loose ends, get new construction homes finished, and get back to the basics. “Realtors across the country confirm what the macroeconomic data says: the housing market is in a transition, driven by an uncertain economy and consumer backdrop. Inflation is hot and economic growth, as measured by the GDP reading, is tepid. But jobs remain plentiful […]

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Q2 2022: Housing Snapshot

By admin_leng | Published July 15, 2022

At the start of 2022 (Q1), we talked about the feeling of knowing things were too good to be true. The feeling of the wind in your hair as you drive “fast” down the road, the feeling of knowing in your mind that everything could change with the smallest bend in the road. Well, the housing market (our industry!) might be close to that bend … we are teetering on the edge … the future most certainly holds change. The most startling point of the second quarter of 2022 is the lack of pending single family homes. Currently, there are 1,751 pending single family homes in the Des Moines metropolitan area. Just a year ago, there were one thousand more […]

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Builder Luncheon Recap, What’s Ahead for 2022, and More!

By admin_leng | Published February 24, 2022

During The Builder and Developer Luncheon on February 24, 2022, I compared the building/housing industry to a Nascar race. With the hot market…we are all speeding down the track at high speeds. Everything is going smoothly. Maybe too smooth. This is exactly how I feel the real estate industry is going right now. The housing market is setting records every way we look at it! Inventory is extremely low, with bidding wars to top it off! As a real estate agent, one cannot work enough hours to keep up with the demand. Everything is moving so very fast (especially price increases), that one cannot help but wonder; how long can it last? When does a tire pop and a multi-car […]

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Q4 2021: 2021 ENDS IN HISTORIC YEAR FOR HOME BUYING

By admin_leng | Published January 27, 2022

A recent article in the Des Moines Register perfectly sums up 2021. In the article, Ted Weaver (past president of the Des Moines Area Association of Realtors) states, “It was a historic year for home sales by any measure.” And we agree, 100%.  The Des Moines real estate market was on fire, not only in the fourth quarter but for the entire year. Record breaking sales and record breaking construction have dominated market conversations for months now. Homes of all types flew off the market. Buyers were hustling to make offers, most finding themselves compromising “must haves” simply to be able to get a home before someone else snagged it up. It has been quite the experience but we should […]

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Q3 2021: Des Moines Metro Housing Snapshot

By admin_leng | Published October 18, 2021

Temperatures are dropping, days are feeling shorter, and our farmers are harvesting their fields. Fall has come to the Des Moines metro and the third quarter of 2021 housing market is wrapping up very similarly to the second quarter. We still have a hot market, high prices and a drought of inventory. What is driving this, you ask? Record low mortgage rates and a scarcity of inventory. Home ownership is within reach for a large number of prospective purchasers as our economy continues to support work-from-home options. This is directly fueling an increase in housing demand. Those in the Des Moines metropolitan areas want detached single-family homes that provide greater living space and separation from adjacent properties. As Q3 comes […]

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Hot Summer and Real Estate Market: Q2 Update

By admin_leng | Published July 14, 2021

Can you believe we are already halfway through the year? Time’s flying as businesses are opening back up, giving us a sense of normalcy. This season we’re back with our friends and family and enjoying summer activities. Speaking of summer — it’s been a HOT one! And the real estate industry has been following very similar trends to this year’s summer forecast.  Hot, high temps, and we’re in a drought: the market remains hot, prices are high and we are in a drought with home inventory!  Though lumber prices are slowly declining, prices still remain high; we have a shortage of material; and also are seeing labor shortages — all of this plays a factor in the increased prices of […]

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Q1 2021 is HOT despite record freezing temps!

By admin_leng | Published February 26, 2021

The ending of the first quarter of 2021 marks the one year mark for the global coronavirus pandemic. Who could have predicted we would also be in the one of the robust housing markets any of us have ever experienced? What brought about this market, we ask ourselves? Was it the extremely low interest rates? Could it be the stimulus money that was introduced into our economy? Is the work from home requirements that our workforce was forced to accommodate? We may never fully understand all the factors that got us to where we are today but everyone can agree; this is uncharted territory for the housing market, both in new construction and resale. When looking at 19 different communities […]

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Des Moines Real Estate in 2020

By admin_leng | Published January 15, 2021

“What a year 2020 has been!” How many times have we all heard that before? Yet it always seems to be so very, very true.  It definitely applies when we look at the housing market!  2020 saw phenomenal sales for new construction homes in the Des Moines area, representing 20% of all single family home sales in 2020.  The last time we reached a number even somewhat close to this was in 2007 at 19% market share.  A truly remarkable year 2020 has been. What is driving this consumer desire for newly built homes? The Urban Land Institute* refers to the current boom as “the great American move”, which was ignited by the pandemic, creating a growing desire to live […]

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How has the pandemic effected the housing market?

By admin_leng | Published October 15, 2020

Can a pandemic be the best thing to happen to the housing market? Interesting enough, it can be! The home building and residential real estate market is booming. 2020 has set a record for the highest number of new construction homes sold in more than a decade. This is going to be a record year for real estate sales! Amidst this unprecedented time, certain economic sectors are struggling, unemployment is high, and construction costs and supply chain issues are a daily problem. At the same time, interest rates are at an all time low and the market is begging for inventory. No one expected a quarter like this, yet alone a year like this! Earlier this spring, many speculated that […]

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Housing Market is HOT Despite COVID-19 Pandemic

By admin_leng | Published July 21, 2020

Summer is upon us and not just the weather is hot; the housing market is HOT! In the midst of the COVID-19 pandemic, the second quarter housing market numbers show that now is a great time to both sell and buy a house. Overall, there is a lack of homes for sale while at the same time, interest rates are very low. These factors together make these summer months the time to move. Sellers will see quick sales while buyers can take advantage of small monthly mortgage payments. When comparing July single family homes for sale 2019 verses 2020, there are 862 less houses available. This is a 36% market reduction, which includes resales and new construction homes. Looking at […]

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Single Family Home Sales Increase from 2019

By admin_leng | Published April 28, 2020

COVID-19 is upon us and the population is quarantined at home. However, it seems that many are feeling that now is the time to find a new home. Customers are taking advantage of online research tools and non-traditional ways of buying and selling property. Interest rates continue to remain low, making this a great time to buy. Kalen Ludwig Real Estate Specialists are practicing social distancing and helping customers in unique ways to keep up with the demand. Single family home sales are up by 116 homes when comparing data from April 2020 (2279 homes) to that of April 2019 (2163 homes). New construction sales are up a total of 43 homes when compared to the same time frame last year. […]

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Economic Update with Elliot Eisenberg

By admin_leng | Published April 02, 2020

Thank you to Elliot Eisenberg for joining us to discuss the impact COVID-19 is having on the real estate industry, and economy as a whole. If you missed the call, or would like to replay the call, you can do so below.

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Cell: 515.402.3169
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