The start of a new year is always a great time for developers, builders and real estate professionals to reflect on the past and start mapping out the future.
Two-thousand-and-nineteen is going to be a year of change as national homebuilders enter the Des Moines Metro and with affordability and rising interest rates being a concern. Personally, I get excited when I think about the validation of a strong market, one that is strong enough to attract the attention and confidence of national builders. At the same time, now is the time to be more intentional than ever with collecting and analyzing data on what is selling – to help determine where and at which price points to build.
When it comes to affordability, I continue to see more and more projects being brought to our marketplace and allowing for the construction of more entry level or affordably priced homes. As we pour over the data, it’s clear that the Des Moines housing market for several years has experienced a relatively low overall supply. On the flip side, some new construction homes in certain price points are hitting their first birthdays and still sitting on the market today.
In regard to single-family homes, the total overall supply has hovered just below three months since 2015. With inventories up to 2,190 active listings – a 7.6 percent increase from a year ago – there are 155 more homes on the market, and a total single-family supply of 2.9 months. One piece of good news is that price points under where new homes can be built are still moving fairly quickly. But inventory in higher price points has grown with listings averaging longer numbers of days on the market.
MY FULL Q4 2018 HOUSING STATISTICS can help assess different cities and various price points related to the supply of new construction homes. The active inventory of new construction homes has continued to increase over the past several years, standing at year’s end with 949 active homes and a 7.2-months supply. You may note that price points in the $300,000 to $350,000 range currently have the lowest month’s supply in the new construction world. With Ankeny, Waukee, Urbandale, Grimes, and Norwalk leading the way, it’s interesting to see the top cities with the most new construction activity in 2018
Since 2011, the Des Moines Metro year-over-year has basically witnessed an increase in the number of homes sold. Heading in to 2019, both locally and nationally, the data on total inventory and home sales – while not implying that we have hit any kind of recession – tell us that the market is slowing and we are reaching a plateau. In Des Moines, 2018 did not surpass the previous year’s data with a total of 9,095 sold, a decrease of 3 percent when compared to 9,415 in 2017.
Nationally, DEFAULTS AND FORECLOSURES ARE AT A VERY LOW RATE and similar to pre-recession levels. Another good sign for 2019 is that current pending home sales in the Des Moines Metro stand almost exactly where we were at a year ago, so we are seeing some momentum at the start of January after a little slow down this past fall.
By understanding the market we are in, we can better position ourselves for a successful beginning. As a builder, I would start by checking the locations and price points you plan to build in 2019.
The 12th Annual Builder & Developer Luncheon is on Friday, March 1, and we would love for you to attend. Mark your calendars to join us and hear more – from a local and a national perspective – about the current state of the market and economy we are in. REGISTER HERE! I look forward to continuing the conversation. As always, you can CONTACT ME DIRECTLY for additional insight or information on the availability of single-family lots and unique Central Iowa housing communities.