Iowa Home Prices Shrink Across Des Moines Housing Market

Within the Iowa housing market, real estate agent Lora Murphy could be called a motivated seller because the three-bedroom, 1942 Beaverdale home she’s marketing is her own.

“The response has been positive,” said Murphy, who listed her remodeled 1,500-square-foot Des Moines home last week.

Nevertheless, Murphy has no illusions that a new owner will emerge as quickly as she did a year ago, when the home sat on the market for a day. Nor that it will sell in less than the week it took in 2004, amidst of a five-year housing boom.

In April, Des Moines housing market properties sat on the market for nearly three months before being sold, according to a new report from the Des Moines Area Association of Realtors. Other sobering news: Home sales last month dipped 3.4 percent - to 877 - from a year ago.

The average sale price fell 3 percent - nearly $5,000 - to $158,631. This is bad news for sellers, but encouraging to any hopeful Iowa mortgage borrowers seeking a deal.

Despite the slow start to the traditional sales season, local real estate leaders expect moderate growth. For example, Carolyn Helmlinger, who leads Coldwell Banker Mid-America Group, expects her agency’s sales to push 7 percent higher this year compared to last.

Iowa Realty Co., the area’s biggest real estate agency, expects a 3 percent to 4 percent increase this year. “2007 is going to look a lot like 2006, which was a good year,” said R. Michael Knapp, the real estate group’s chief executive.

The crucial component is jobs, Helmlinger said. Des Moines’ forecast is bright, with April’s unemployment rate at 3.1 percent. It outpaced the statewide jobless rate of 3.4 percent and national rate of 4.5 percent.

In the past two years, the Des Moines metro has added 14,500 jobs, according to data from Iowa Workforce Development. This ought to help individuals be qualified for various types of mortgage loans.

Walter Molony, a spokesman for the National Association of Realtors, said the group’s first-quarter data show Iowa and Des Moines outperforming the national market.

“Des Moines has shown steady gains over time,” he said. “The areas doing best are those with affordable prices.”

First-quarter home sales in Iowa increased 8.2 percent from a year ago, while nationally, sales dropped 6.6 percent, according to the group. Also, median home prices in Des Moines increased 3.5 percent to $144,500 from a year ago, while the average sales price nationally fell nearly 2 percent to $212,300 for the first quarter.

Sales in the Des Moines metro area declined 3 percent to 2,070 in the first quarter.

“Spring is going to be soft nationally - down slightly or flat with a slow gradual increase,” Molony said.

Helmlinger and Knapp said the Des Moines metro’s sales pending - which were 7.4 percent higher in April vs. a year ago - are a better indicator of the market’s performance.

Iowa home loan shoppers with families typically start shopping for homes in April, with the greatest sales logged from June through August, Molony said.

“There’s a lot of great inventory and a lot of choice,” Helmlinger said. “It’s going to take a lot longer to make a decision.”

Murphy, the Iowa Realty agent who’s selling her Beaverdale neighborhood home, said she feels that remodeling her kitchen and other improvements give the house an edge over others. She has her eyes on a couple of homes in West Des Moines for her and her four boys. She’s moving closer to her work.

“I don’t want to get too excited, but I think I’ll have a buyer in a couple of weeks,” she said.

SOURCE: The Des Moines Register