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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 to find the sweet spot of opportunity to show up at the party when the energy is just perfect for success.


February 2024 Snapshot

Active single family homes for first quarter 2024 are up slightly from last year at a modest 2.4 month supply. (2023 was a 1.9 month supply.) This translates to 73 more active homes. Meanwhile, active listings for new construction homes were down from last year at a 5.8 month supply versus a 6.2 month supply in 2023. Progress has been made..

Overall, pending numbers almost mirror where they were a year ago. Presently, there are 1,058 pending homes with 377 of them being new construction.

New Construction Inventory

For the past decade, new construction homes have dominated the available inventory. Before the pandemic, new homes made up about 30-40% of the market with a peak at 71% from 2021 to 2023. Builders have tracked and reacted to these inventory levels in an impressive way, keeping a six-month balanced supply point. Today, we see this trend gradually leveling out. Only 57% of the current inventory belongs to new construction homes.

Looking back at 2023, the overall number of single family homes sold has not been this low since 2013. Last year, 7,718 single family homes were sold, of which 1,771 (23%) were new construction. The sales figures for these new construction homes surpassed any volume seen since tracking began in 2007 – with the exception of the pandemic years of 2020-2022.


Housing Affordability

Sales prices continue to rise but at a more typical rate. The average sale price of a single family, new home in 2023 was $447,000. This reflects a 3% increase compared to the year prior. When comparing that to the 16% increase in 2022 and the 9% increase in 2021, this shows significant stabilization in the market.

Builders, developers, and agents alike have been eagerly awaiting a drop in interest rates but uncertainty remains. In the past three years, interest rates have more than doubled. For the first time since 2007, (in 2022 and 2023) the median household income in Iowa could NOT afford the average new construction home. This is uncharted territory for those in the industry. With interest rates trending upward, the Feds put a damper on demand to intentionally slow inflation, resulting in an increased cost of living for the average homeowner.


Looking Ahead

In all 19 of the Des Moines metro communities, homes are selling despite the high interest rates. Overall, sales for 2023 were not as dire as many had feared. What is interesting is the shift in new lots developed. Last year, it was predicted that developers would pull back in 2023 and they sure did!

Only 1,979 new lots were brought to the metro in 2023. The number of permits pulled was down 10.6%. And we expect developers remain cautious heading into 2024. Keeping an eye on the supply is crucial as we lean into the future. There is still a housing shortage. Resales are locked in at historically low interest rates, giving new construction a crucial role in the market for the foreseeable future.

The market offered a brief lowering of interest rates in December, bringing a surge of pending homes. This proves that there is demand, just sitting on the sidelines. Buyers are ready but affordability is holding them back. We must look at stabilizing affordability with price adjustments, construction of smaller homes, and reduction of local regulations.

Spring is coming, which traditionally means party time for those of us who are builders and developers. Who will be ready for the festivities and jump right? Who will wait and take a more cautious approach? With no straight answer of when to arrive, one must be careful not to miss the party all together. The excitement is here. Don’t let the uncertainty get the best of you.


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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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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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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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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 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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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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Kalen Ludwig
Cell: 515.402.3169
[email protected]

Keaton Dreher
Cell: 515.650.1276
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Office: 515.222.1347
12119 Stratford Drive, Suite B
Clive, IA 50325

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