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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 to the spring/summer season, which sees more homeowners listing their properties for sale. However, when we zoom in on the new construction market, the scenario changes. The inventory for new construction single-family homes has declined from 1,018 last quarter to 895 today. This decrease indicates a potential shift in buyer preferences towards existing homes.

Total Active Listings
Taking a broader perspective, if we compare the current inventory numbers to the previous years, we can see that we are still experiencing a lower supply than what we witnessed in 2018 and 2019. This scarcity of available homes has been a persistent challenge for buyers in the market.

Months of Supply
To gauge the balance between supply and demand, we look at the months-of-supply metric. In Q2 2023, the total months of supply for the overall market is 2.4, indicating a tight market. However, when we analyze new construction specifically, the months of supply extend to 6.2 months, which is considered a balanced market. This slight increase in supply offers some relief to buyers actively searching for their dream homes.

Pending Sales
Looking at the number of pending sales, we can observe a decline compared to the previous years. Currently, there are 1,427 SF homes pending, with 436 of those being new constructions. Although these numbers are lower than the last three years, they are in line with the market trends observed in 2018 and 2019. This indicates that the market is stabilizing to a more standard type of year.

Sold Homes
In the past 12 months, a total of 8,143 SF homes have been sold — a decrease of over 2,600 homes compared to the previous year. Despite this decline, there is still a strong demand for homes in the market.

Market Outlook
As we look ahead, it’s important to note the impact of interest rates on the market. While the current situation may resemble the slower pace of 2018 and 2019, when it took several months to sell a home, there are factors that may positively influence the future. The recent Consumer Price Index (CPI) numbers, which indicate a 3% increase, can result in lower interest rates. If this trend continues, with interest rates in the low 6’s or even into the 5’s, we could see a robust spring market in 2024.

The real estate market at the end of Q2 2023 is a battleground between supply and demand. While the total inventory of single-family homes has increased, the inventory for new construction homes has declined. Despite this, the market is still experiencing a lower supply compared to previous, more standard years. The months of supply for new construction indicate a balanced market, yet for builders it feels slow paced after the last 3 years of extremely high demand and sales.

Pending sales and sold homes numbers have decreased, but the market is stabilizing to a more standard type of year. As we move forward, the impact of interest rates and the potential for a robust 2024 spring market are factors to watch. It’s an exciting and dynamic time in the real estate market, and with the help of a knowledgeable real estate specialist like Kalen Ludwig, buyers and sellers can navigate this ever-changing landscape with confidence. So, whether you’re looking to buy or sell a home, buy a lot, or build a new home — now is the time to take advantage of the opportunities available in the market.

 

Download the full Q2 2023 Report

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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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Economic Update with Elliot Eisenber, Hosted by Kalen Ludwig

By admin_leng | Published March 27, 2020

We know questions about the economy — especially in the housing market — is on many people’s minds during this unprecedented time in our history. We are excited to have internationally acclaimed economist Elliot Eisenberg join Kalen Ludwig on April 2nd to discuss development, new construction and the housing industry as a whole. We’d love to get as many of your questions answered, so we ask that you provide them to us in advance. Email them to Kalen Ludwig at [email protected]. ~~~~ Full Meeting and Dial-In Information Topic: Economic Update with Elliot Eisenberg, Hosted by Kalen Ludwig Time: Apr 2, 2020 01:00 PM Central Time (US and Canada) Join Zoom Meeting https://zoom.us/j/345558691 Meeting ID: 345 558 691 One tap mobile […]

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Continuing to work for you amidst COVID-19

By admin_leng | Published March 23, 2020

We understand that your housing needs — whether you are buying or selling — doesn’t stop in the face of this pandemic; especially when mortgage rates are at a steady low. Rest assured, we won’t stop working for you and our number one priority at Kalen Ludwig Real Estate Specialists is your health and safety. We are happy to assist you in smart, private showings. We also are equipped with hand sanitizer, gloves, and everything you need giving you added peace of mind. You won’t even have to leave the comfort of your home with our virtual tour options. Whatever virtual platform you prefer to meet on, we are ready and prepared. Stay safe and healthy! We are here for you […]

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Q1 2020: DES MOINES METRO HOUSING SNAPSHOT

By admin_leng | Published February 26, 2020

Earlier this month, the groundhog told us “spring is coming” as he crept out of his burrow after his long winter sleep.  Spring, indeed, is coming and for the real estate and homebuilding industries this is an exciting time of year! We left off in January looking ahead to 2020 with mixed expectations as some were feeling there was great potential laying ahead while others felt a market slow down could be predicted.  As we approach the end of February 2020 and let the data do the talking, it seems the optimists were right and there IS great potential to come.  Total active listings has decreased and mortgage rates have stayed low. To begin, let’s look at the Des Moines-area […]

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Q4 2019: Des Moines Metro Housing Snapshot

By Kalen | Published January 20, 2020

It’s a wrap! Now that 2019 is behind us, it’s a good time to take a look back at the performance of our Des Moines Metro housing market last year. From recent conversations I’ve had with leaders in the real estate and homebuilding industries, there seems to be a mixed bag of opinions about the state of the market and expectations for the coming year. Some feel that they are the busiest they have ever been and see GREAT POTENTIAL for 2020. Others are feeling a bit slower than previous years and see signs of a slower real estate market. As we start peeling back the data, what we can see right away is an overall low supply that has […]

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Q3 2019: Des Moines Metro Housing Snapshot

By Kalen | Published October 25, 2019

Like it or not, autumn has arrived and old man winter is fast approaching in Central Iowa. Speaking of crazy Iowa weather, it has actually played a very interesting role in this year’s real estate sales and market activity. Excessive rainfall in recent months helped turn some building sites into impromptu slip-and-slides, causing delays in construction and contributing to a lower-than-expected number of housing starts. Developers, too, haven’t been able to get in all the plats they had hoped and many are playing catch up following a super wet summer and spring. Currently, interest rates, talk of future recession, and a dip in home sales from prior years are each at the forefront of everyone’s mind. In reality, weather conditions […]

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Q2 2019: Des Moines Metro Housing Snapshot

By Kalen | Published July 15, 2019

There’s some welcome news in today’s market for buyers and sellers ready to make the most of the summertime house hunting and homebuilding season. MORTGAGE RATES dropped since April, and are currently at the lowest levels we have seen for over 18 months. So the market is seeing some traction as more buyers are showing an interest in making offers, due to the improved affordability! As of July 1, the total number of active single-family homes on the Des Moines Metro Market, including re-sales and new construction homes, had increased 5.9 percent to 2,370, compared with a year earlier. When you single out the active inventory of new construction single-family homes, we actually saw a decrease from 853 a year […]

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