Fire Up The Crystal Ball

Des Moines October Market Monthly Interactive Review

Before I get into some year end predictions, click the image below to access the interactive October market report.

Ten Months Down – Two Months to Go

I’m going out on a limb this month. With just days before the Presidential election and the likely weeks of controversy afterward, I have decided to go ahead and make some year-end predictions. Some would say this is crazy but rather than getting caught up in the now, I’m looking to the future.

Number of Homes For Sale

Of all the data, this should be the easiest. With a typical start in January and February, it looked like homeowners were ready to finally jump back into the for-sale market with both feet. Of course, when Covid hit in early March, the number of homes for sale seemed to stall – until mid-way through April. Then the big slide began. With dropping mortgage interest rates and owners working from home, home buyers started (and continue) to buy up most of the home inventory.

PREDICTION

Based on what For-Sale inventory counts did in the previous 3 years, my prediction for the remaining 2 months of 2020 is that we will end the year right around 2,400 homes for sale. Regardless of how low our inventory goes; it will be the lowest number of homes for sale at the end of a year in at least the last 20 years.

Number of Pending Sales

This prediction may be a little trickier. On average, the number of days it took last year from offer acceptance to closing during the last two months of the year was 48 days. This means that most offers written after November 14th last year didn’t close until January of 2020.

PREDICTION

With over 3,100 homes currently in the sale pending que and 1,000 of those new construction at various stages, I am going to predict that we will end 2020 with just under 2,600 homes in Sale Pending status. (2019 ended with 1,545 sale pendings)

Number of Homes That Will Sell in 2020

There is no doubt that barring a complete shutdown of the real estate economy, the year 2020 will end with record high closed sales. The December 31st counts for the past 3 years all ended with over 14,000 sales. 2017 was the highest count with 14,603 sales recorded as of the last day of the year.

PREDICTION

With the remaining time left in the year and the increased number of homes in sale pending status, I am going to make a bold forecast for 2020 closed sales by predicting a December 31st closed sale count of 16,000 closed sales and shattering the previous record high set in 2017 by well over a thousand transactions

Median Sale Price – Single Family Resale and Single Family New Construction

Sale pricing and appreciation of values are two distinct numbers. Until 2020 has ended and all final sales are recorded, I cannot give an accurate prediction of home price appreciation. There are so many variables including the affordability of mortgage money alone that will make me wait until late January 2021 to determine home appreciation rates.  However, median sale prices are much easier to calculate since that data is tied directly to closed transactions.

PREDICTION

Single Family Resale

I predict that the median sale price ends the year at $215,000 – $20,000 higher than 2019. The main factors in this jump is lack of inventory, Covid-19 buyers needing more space in their homes and sub-3% mortgage interest rates.

Single Family New Construction

Single Family New Construction – I predict that the median sale price ends the year at $295,000 – $25,000 lower than 2019. The main factors in this drop is a lack of resale inventory pushing more buyers to buy new, more entry level new construction pricing aimed to fill that gap of resale inventory. The sub-3% mortgage interest rates allow previously credit stretched new home buyers the ability to buy new construction.

In Closing

Overall, this is about as brave as I can get with forecasts as we head into the final two months of 2020. In a year with a world-wide pandemic and political election looming, it is proof that there is “no place like home” to be…. buying, selling, living, working, schooling, remodeling, refinancing.

Click To View The Full October Report

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Click This Link for the 2019 Des Moines Real Estate Year End Market Recap

~Les Sulgrove, Vice President
VIA Group REALTORS

If you are interested in selling your home or purchasing a home, give me a call! I will help you determine your best strategy based on your local market data.

About Les Sulgrove

Les is an Iowa native born in Des Moines and raised in the southwest Iowa town of Bridgewater. He has been a resident of Des Moines since 1982 and has been married to his wife Linda for over 35 years. Together they have 3 grown children, 7 grandchildren and make their home on Des Moines south side. He has been a licensed REALTOR® since 1990 and is Vice President at VIA Group, REALTORS®. Les is the 2011 Past President of the Des Moines Area Association of REALTORS® (DMAAR) and received the award of Salesperson of the Year by DMAAR in 2007 for his involvement and service to the Association. Additionally, he is active at the Iowa Association of REALTORS® and serves on local, state and national committees. He also owns and operates the national technology networking group CyberProfessionals. This group of real estate professionals meets twice annually across the United States to learn from each other and share new marketing ideas with heavy emphasis on current and future technologies and their use in the real estate business. Les’ hobbies include golf, photography and sarcastic humor. He and Linda spend many Saturday mornings from Spring to Fall at the Des Moines Downtown Farmers Market. He enjoys spoiling his grandchildren at every opportunity.

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