The number of homes on the market in the Des Moines metro area rose again this past month to 34% over this time last year, reported the Des Moines Area Association of REALTORS® (DMAAR). 2952 homes were on the market in November 2022, while 2194 homes were on the market November 2021. Slight decrease of homes on the market from October 2022 (2989).
Homes sales dropped in November by 14% compared to October. Down 32% from November of 2021. 933 homes sold in November 2022, while 1386 homes sold in November 2021.
The median sale price decreased slightly from last year. November 2021 the median sales price was $252,000. This November it calculated to $250,000. However, the interesting stat is in the decrease of the median sale price from last month to this month! -5%! The average days on market were 33 days, last month was 34 days.
My take: I think this time of year people are wondering what will happen with real estate next year. After much research from various sources, here is what I can summarize for you:
Home prices will increase slightly: +5.4%. (In 2022, home prices increased +10.2%.)
Home sales are forecasted to be -14.1% to 4.53 million from 2022.
Mortgage rates forecasted to be 5.5%-7.1%. Economists and the NAR differ on this one.
Home ownership rate is pretty steady throughout the last 3 years at 66%.
Rent growth: +6.3%. Notice how it is higher than our home price growth.
Home inventory will increase +23%. (In 2022 it was +4%. In 2021 it was -19.4%.)
What I find interesting is that in 2021 when mortgage rates were LOW (3%) and inventory was LOW (-19.4%), home prices were HIGH (up +17%) and home sales were HIGH at +8.5% (6.12 million, the highest in years). So, this data suggests what will happen in our market when mortgage rates are HIGH, and inventory is HIGH and home prices are LOW and home sales are LOW…it will balance out our market providing opportunity for many.
Where I differ with these national forecasts…they are saying it will remain a Seller’s Market throughout 2023..but I’m not so sure. Locally, our homes on the market are up 34% since last year. This fact, along with higher interest rate and some buyers not able to qualify for a mortgage loan at 6% are dropping out. This is bringing price reductions. BUT, there is still buyer demand and they like having more homes to choose from. Sellers in 2023, will have to be more patient and more reasonable about pricing their homes.