Des Moines realtor group expects a shift in metro home prices
Though 30-year mortgage rates pushed above 5% in May, prices and sales of Des Moines metro homes continued their upward trend, according to the latest monthly market report from the Des Moines Area Association of Realtors.
The median sale price was $275,000 for May, a 3% rise from April’s median price of $266,860 and an 11.8% gain from May 2021.
The newly released figures also tracked 1,453 residential properties sold during the month, a 9% gain from the 1,331 homes sold in April.
Though there was no immediate financial relief for local homebuyers, who’ve seen record prices in 2022, DMAAR President Jen Stanbrough said a shift in the market may be on the horizon after 10 years of rising prices. She noted some recent price cuts as mortgage rates have pushed even higher in June, with some median measures nudging close to 6%, a level not seen in a dozen years.
That’s about double the low hit in 2021, adding roughly 40% to monthly principal and interest payments.
“What I’m seeing from price reductions, that we have not seen for a while, we will start to see a little bit of correction coming in maybe our June numbers, but I think we’re going to see that more to the end of July or August,” Stanbrough said.
In May, however, homebuyers remained in a rush to purchase, with homes on the market for an average of 31 days, one day less than in April.
The urgency to buy resulted in an increase of counteroffers, and an unusually high number of cash bids from purchasers, accounting for almost 10% of sales in May.
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Stanbrough, who heads Jen Stanbrough Real Estate in West Des Moines, remains bullish on the value of homeownership across all price points.
“It’s still a great time to buy,” she said. “Interest rates are still very low compared to historical data. And also, there are many different tools that are out there, lending tools, buying down your interest rate a little bit, or adjustable-rate mortgages.”
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And she said she senses a slow return to a normal in a real estate market that has strongly favored sellers.
“We’re starting to see more inventory, which has been great, that’s going to stabilize things. And we’ve also seen some price reductions. We have not seen as many as we did this last week since 2018,” Stanbrough said.
There were 2,049 properties on the market in May. That was up from 1,791 a month earlier and only slightly more than the 1,734 homes for sale in May 2021.
“We’ve been in some timeframes where maybe buyers didn’t feel like they were they were winning at all. And so seeing that little bit of balance come back is refreshing as well,” Stanbrough said.
Local renters continue to face a far less volatile market. Dwellsy, a national online listing service for rental properties, has calculated the median asking rent in the metro rose 0.9% over the previous 12 months. Nationally, renters are facing a 25.9% increase year-to year in their median rent
When comparing May with April, Dwellsy determined there was no change in the Des Moines metro’s median rent.
Richard Lane is the real estate reporter for the Des Moines Register. He can be reached at firstname.lastname@example.org.