The red-hot Des Moines metro housing market is cooling.
New figures released Monday by the Des Moines Area Association of Realtors showed 1,452 homes sold in the region in July, down 14.7 percent from the 1,703 sold in July 2021.
As of March 2019, sales were down 19.2 percent from the March 2018 total, the biggest month-over-year decline.
The median home sale price in July was $272,990, down from $283,500 in June, a record high for the market. Sales prices can be volatile, but it was the first discount since February.
After increasing from January to April, year-over-year sales fell by 2.9% and 3.5% in May and June.
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Overall, the Des Moines market slowed after a historic nine-month streak of double-digit sales growth from September 2020 to May 2021. That level increased by 38.8% in December 2020.
The market has cooled in part because mortgage rates rose sharply this spring, with 30-year loans reaching more than 6 percent in June. U.S. Bank on Monday introduced a 5.125% rate on the 30-year mortgage, a somewhat big jump from last year’s low rates of less than 3%.
According to Fortune, Moody’s Analytics is forecasting flat sales prices for the Des Moines metro through 2023, rising about 1 percent a year to 11 percent in 2021 and more than 5 percent in 2020, according to the Association of Realtors’ annual numbers.
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Forecast: Des Moines metro home prices are expected to continue to increase
The good news for Central Iowa homeowners is that Des Moines remains among the few markets where Moody’s predicts price increases for 2023. In 231 — more than half — of the nation’s 414 largest housing markets, Florida is asking for price cuts, along with some. The cost of seeing Metro is reduced by up to 7%.
For Des Moines metro homebuyers, the median home sale price, even after rapid increases, is much lower than the nation as a whole. The national median home price surpassed $400,000 for the first time this spring.
Also, Jane Stanborough, president of the Des Moines Area Association of Realtors, said the number of properties on the market in the metro increased by 24% in July, pointing to an increase in housing inventory. 2021″
Despite the dramatic slowdown in sales last month, West Des Moines Realtor Gina Swanson said she’s not seeing a market downturn — just a bit of a buying frenzy.
“It’s getting a little colder,” Swanson said. “It’s still burning a little bit, but the whole house isn’t burning now.”
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She said demand is strong and she has a list of buyers looking for the right properties.
“When interest rates went up, people were very angry about it for a few weeks,” she said. “But they still realize it’s better to buy than rent,” with mortgage rates higher but still below historic highs.
“I think prices are going to keep going down,” she said. But I can guarantee that housing prices will never go down. They don’t accelerate.
Bill Steeden is the Register’s operations and investigative editor. Contact him at wsteiden@registermedia.com.
