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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 some relief to buyers who prefer established properties over new builds. There are 2,277 active single-family homes, representing a 3.6-month supply, up from 1,837 homes and a 2.8-month supply a year ago. Of these, 1,000 are new construction homes, accounting for a 6.6-month supply. Additionally, pending sales have risen to 1,169, compared to 1,015 at the same time last year.

Comparing 2024 to previous quarters reveals that total inventory has increased by 440 homes since Q3 2023. New construction now represents 44% of the active listings, down from 51% last year, signaling a slight market shift as resale homes gradually return. This shift reflects a more balanced market, though new construction continues to hold a significant share.

Looking back over several years, inventory levels are becoming more comparable to the pre-pandemic period of 2017-2019. While new construction inventory remains higher than in recent years, it’s still relatively in line with the levels seen during that period. Pending sales are also slightly up, with 1,169 single-family homes under contract compared to 1,015 a year ago, suggesting that the stabilization of interest rates has motivated some buyers to act. However, pending sales are still down compared to the highs of Q3 2021 and Q3 2020.

 

 

In terms of sold homes, 6,100 homes have been sold to-date, with 1,458 (24%) of those being new construction. This is a slight decrease from recent years:

  • Q4 2023: 6,196 homes sold, with 1,425 being new construction
  • Q3 2022: 7,658 homes sold, with 1,744 being new construction
  • Q3 2021: 8,337 homes sold, with 1,702 being new construction

Over the years, from 2007 to 2024, the percentage of new construction homes sold each year stayed relatively consistent between 16% and 19%. However, starting in 2020, this figure began to rise, reaching 20% in 2020, 21% in 2021, 23% in 2022, and now 24% in 2024 year-to-date. This steady 1% increase over the past five years highlights the growing prominence of new construction in the market, especially as resale opportunities have been limited. In a rapidly expanding area like Des Moines, builders have played a crucial role in adding inventory to meet buyer demand, compensating for the scarcity of resale homes.

With stabilizing interest rates, 2025 could bring fresh opportunities for buyers and sellers. Buyers may benefit from increased inventory, while sellers will likely see steady, though less frenzied, demand. New construction will continue to play a key role, especially in Des Moines, where it helps offset limited resale supply. Like the unpredictable weather, the 2025 real estate market will likely be a mix of highs and lows. However, stabilizing rates and growing inventory offer hope for a more balanced market. 

Read our full Snapshot Report now for detailed insights.

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