The number of homes on the market in the Des Moines metro area remained stable, with just 12 fewer homes listed in February compared to January according to the Des Moines Area Association of Realtors. Despite the slight monthly decline in inventory, February’s 2,463 listings were nearly double - 47% - that of the same time last year when there were just 1,667 houses on the market.

Home sales, or homes that closed in February, rose 16% with 695 homes sold compared to the 596 sold in January. While the uptick is encouraging for 2023, it does represent a 21% decrease from the 882 homes sold in February 2022.

Pending sales saw a 6% decrease from 1,104 in January to 1,032 pending sales in February. The decrease was wider year-over-year, with about 26% fewer pending sales last month compared to the 1,398 of February 2022.

The median sale price of $245,000 represents a nearly 4% decrease from last month’s median price of $255,000. However, it is the exact opposite year-over-year, with February 2023 median sale prices increasing 4% compared to the $235,000 median price of February 2022. Last month, homes averaged 59 days on the market, an increase from both January 2023, which saw 52 days on market, and February 2022, which averaged 44 days on market.

My monthly take on real estate: Talking heads seem to be talking about a potential housing market crash. I guess it’s the latest greatest head-turning newsbyte. But after doing my research evaluating what national economists, leading experts, and industry insiders are saying, here are the reasons why the housing market is not going to crash:

Today’s housing market is different than it was in 2008. It used to be easier to qualify for a home loan. Now, lending standards are tightened, so today’s buyers are more qualified. As a result, the number of foreclosures has significantly declined over time which is ‘crash’ symptom that is missing in today’s market.

In 2022, foreclosures were down 34% compared to 2019, according to ATTOM Data’s Year-End 2022 U.S. Foreclosure Market Report. “It seems clear that government and mortgage industry efforts during the pandemic, coupled with a strong economy, have helped prevent millions of unnecessary foreclosures,” said Rick Sharga, executive vice president of market intelligence at ATTOM Data. A key difference now compared to the 2008 housing crisis/bubble is that many homeowners, and even those struggling to make payments, have had a large boost to their home values in recent years. That means they still have equity in their homes and are not underwater. Borrowers in foreclosure are leveraging the positive equity in their homes by refinancing their home or selling for a profit.

Home price gains have resulted in near-records amounts of equity, and that puts homeowners in a much stronger position. Other experts point out that today’s homeowners also stand on much more secure footing than those coming out of the 2008 financial crisis, with a high number of borrowers having positive equity in their homes. Consequently, the likelihood of a housing market crash is low.

At the same time, there is an undersupply of homes available for sale today, which helps keep prices from crashing. Those who purchased homes in recent years at record-low interest rates are staying put. What’s more, builders remember the Great Recession all too well, and they’ve been cautious about their pace of construction. The result is an ongoing shortage of homes for sale. These tight inventory issues, in part, are keeping prices from dropping off. A low housing inventory means that buyers will typically pay more for homes because the demand for those on the market tends to be higher. The Month’s Supply of Inventory, better known as MSI, is a numerical representation between the supply for homes and the demand for them.

Lastly, in a housing market crash, you would typically see a 20% to 30% drop in home prices and a decline in home sales—far more than what’s currently happening.

NAR chief economist, Lawrence Yun says, “We simply don’t have enough inventory. Will some markets see a price decline? Yes,” he says. “[But] with the supply not being there, the repeat of a 30% price decline is highly, highly unlikely.”

So, to crystalize what the economists are currently saying, the national housing market will cool rather than crash.

Locally, I believe we will see a slower paced market than last year, with fewer sales overall. The low inventory of homes for sale will keep our home prices, with the gains they saw last year, fairly steady. Sellers will be more open to buyer's concessions as buyer demand will persist, but we will see fewer buyers than we saw in 2022.