End of February Des Moines Real Estate Market Update
If it feels like we are already in a spring market, read on.
Mild weather and anxious home buyers have set the stage for a repeat of last years spring buying market in Des Moines. The only question is will they be able to find the home they want without having to be in a bidding war? And what about home sellers that are hesitant to put their home on the market for fear that they may not be able to find their next home? There are distinct advantages to the three different types of market we can experience when buying or selling real estate. These three market types are Buyers Market, Sellers Market and Balanced Market. One could argue that a Buyers or Sellers Market would see a potential disadvantage depending on if you are a Buyer or a Seller.
The three market types and characteristics of each
- Buyers Market Is Defined As Greater Than 6 Months of Inventory
– Advantage Buyer- In a Buyers Market, home inventory levels are typically plentiful.
- When there are more homes for sale than the buyer pool demands, buyers have the luxury of taking their time looking.
- It is uncommon to see multiple offers in this type of market because if a buyer doesn’t get this particular home, there are plenty of others to choose from.
- Home prices tend to be lower and seller concessions more frequent as Sellers try to make their home “the choice” over the competition.
- Days on Market tend to increase.
- One last note – in a Buyers Market, Sellers are more likely to bring their homes into tip top condition and low appraisals are uncommon.
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- Balanced Market Is Defined As Between 4 and 6 Months of Inventory
– Advantage Neutral To Buyer and Seller- In a Balanced Market there is an adequate number of homes for sale for the current buyer pool.
- There may be times of multiple offers, but average sale price to list price remains steady around our normal 3% to 5% of marketing price.
- Home prices tend to remain stable 0r flat with a minimal appreciation over the year.
- Days on Market tend to reflect the benchmark of 90 days from list to offer acceptance.
- In a Balanced Market both Buyers and Sellers feel fairly comfortable with the process and Sellers are able to look for another home while marketing their current one.
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- Sellers Market is Defined As Less Than 4 Months of Inventory
– Advantage Seller- In a Sellers Market the initial thought is that this market type is great for a seller and it is if you are not in turn becoming a new home buyer.
- With low home inventory, Buyers have to be ready to act quickly when a potential new property hits the market.
- Multiple offers are more common and even frequent as inventory drops to around the 3 month mark.
- Days on market plummet in some cases to Hours on Market.
- As a result of the high demand, home prices rise quickly, sometimes beyond the boundaries of appraisal standards which cause even more angst among both Buyers and Sellers.
- In a Buyers Market I mentioned that Sellers are more likely to bring their homes into tip top condition. In a Sellers Market, Buyers are still demanding that homes be of value and in very good condition, however we tend to see less negotiation on pricing, especially when the homes initially enter the market.
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In Summary
Whether buying or selling a home, ask your real estate professional what type of market we are currently in. Do not assume that because one part of town is extremely popular that it will transfer to your part of town. There are always going to be pockets of any community that is selling faster and at a higher price point that others. Outside factors come in to play such as schools, shopping, entertainment, distance from major employers, etc. Unfortunately there is not a standard “one size fits all” answer to real estate market activity.
~Les Sulgrove, Broker
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.
February 2016 End of Month Recap Reports
(Click on Thumbnail To Download Full Sized PDF)
February 2016 Year To Date Homes For Sale
February 2016 Year To Date Pending Transactions
February 2016 Year To Date Homes Sold
February 2016 Year To Date Balance of the Market
Signs The Real Estate Market Has Taken Off (Infographic)