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Axios Des Moines Deep Dive

Picture of the Des Moines skyline with DSM written across it.

Get smarter, faster about what’s happening in your backyard with local reporters Jason Clayworth and Linh Ta.

Axios Des Moines Thought Bubble

Axios Des Moines

Rents are coming down for one- and two-bedroom apartments in Des Moines, according to rentals site Zumper.

Why it matters: Affordability concerns are starting to weigh down the booming rental market.

By the numbers: In January, the city's median rent price for a one-bedroom apartment was $910, down 6.2% from last month, Zumper found.

The median two-bedroom rent dropped 5.9% and now cost $960, per the data.

What's happening: Many would-be home buyers chose to rent longer last year, sustaining apartment demand, economists at Moody's Analytics say. But folks are hitting their spending limit.

For the first time in over two decades, households now have to spend 30% of their income on average rents.

Year-over-year rent growth slowed in the second half of the year across the board, "and we expect further deceleration as new supply makes it to market at the same time the labor market softens," senior economist Lu Chen tells Axios.

Zoom out: Rents are already falling in cities that were near the epicenter of the pandemic home-price boom, Axios' Matt Phillips reports.

What we're watching: New apartment construction. The expected surge in supply could help bring down prices.

Yes, but: Experts tell the The Wall Street Journal that most cities will "remain undersupplied with the kind of affordable units that see the highest demand." 

Des Moines rents are cooling off

Affordability concerns are starting to weigh down the booming rental market.

Illustration of apartment doorbells with an intercom shaped like a dollar sign.

Rents are coming down for one- and two-bedroom apartments in Des Moines, according to rentals site <a class="gtmContentClick" data-vars-link-text="Zumper" data-vars-click-url="https://www.zumper.com/blog/rental-price-data/" data-vars-content-id="133162cc-0c94-45a0-a208-d087e1c08c76" data-vars-headline="Des Moines rents are cooling off" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.zumper.com/blog/rental-price-data/" target="_blank">Zumper</a>.Why it matters: Affordability concerns are starting to weigh down the booming rental market.

Real Estate

Axios Des Moines, anchored by Jason Clayworth and Linh Ta, is here to help readers get smarter, faster on the most consequential news and developments unfolding in their own backyard.

Data: Freddie Mac; Chart: Madison Dong/Axios Visuals

Des Moines' real estate market is starting to level off, according to the latest data from Redfin/MLS.

Why it matters: After two-plus years of plummeting inventory and sky-high home prices, metro-area buyers have waited a long time for a little relief.

What's happening: Mortgage rates started to surge in May and have since passed 6%, squeezing homebuyer budgets.

By the numbers: Inventory is up 6.4% and pending sales are down 33.4% since May.

Median home sales prices fell from $276,000 to $275,000 from May to September.

Sellers are increasingly dropping their asking price. Close to 36% of listings had price cuts in September, up from 26.1% in May.

Meanwhile, a shrinking share of homes sold above list price. In September 32.5% of homes sold above list price, down from 46.1% in May.

Homes are now sitting on the market more than twice as long. In May homes sold in seven days on average, compared with 15 days in September.

Yes, but: Monthly mortgage payments are significantly more expensive than they were a year ago.

The bottom line: Des Moines' market is calmer, but buying a home right now isn't necessarily cheaper. 

Buying a house in Des Moines is finally easier, but not cheaper

Des Moines' real estate market is starting to level off.

Des Moines&#x27; real estate market is starting to level off, according to the <a class="gtmContentClick" data-vars-link-text="latest data" data-vars-click-url="https://www.redfin.com/news/data-center/" data-vars-item="in_content_link" href="https://www.redfin.com/news/data-center/" target="_blank">latest data</a> from Redfin/MLS.Why it matters: After two-plus years of plummeting inventory and sky-high home prices, metro-area buyers have waited a long time for a little relief.

News

With pending home sales down about 7% year over year, Des Moines' real estate market is showing early signs of slowing down. But home prices are still up 12% from May 2021.

Driving the news: We keep hearing about a market crash, but so far, local data don't support that claim. 

Yes, but: Monthly data show early signs of a cooler market, even if it's slight. 

What's happening: From May 2021 to May 2022, new listings were down 5.2%.

More buyers are holding off as home ownership becomes too expensive.

This comes after mortgage rates surpassed 5% for the first time in 10 years.

Fewer homes sold for over the asking price. There was a 6.8 percentage point decrease in homes sold at a premium this June compared to last year, according to Redfin.

Zoom out: Nationally, mortgage applications were down 24%, and, on average, 6.5% of sellers dropped their asking price each week in June, per Redfin's latest market update.

In June, national pending home sales were down 13% from this time last year,  the largest decline since May 2020, Redfin's report stated. 

Be smart: Inventory is still critically low overall, which continues to push home prices up. 

What we're watching: New listings and pending sales. If more listings flood the market this summer and buyers don't bite, that's when we would start to see more power shift into buyers' hands.

Bottom line: We're not seeing major changes in Des Moines just yet, but we're starting to see early signs of a cooling market.

Des Moines' real estate market is shifting, slightly

Monthly data show early signs of a cooler market, even if it's slight.

Illustration of a downward trend line over a house

Real estate

A graph of Des Moines' shifting housing market. 

With pending home sales down about 7% year over year, Des Moines&#x27; real estate market is showing early signs of slowing down. But home prices are <a class="gtmContentClick" data-vars-link-text="still up 12%" data-vars-click-url="https://www.redfin.com/news/data-center/" data-vars-content-id="be4f2f0a-47db-471e-8e79-6f23876122de" data-vars-headline="Des Moines&#x27; real estate market is shifting, slightly" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.redfin.com/news/data-center/" target="_blank">still up 12%</a> from May 2021.Driving the news: We keep hearing about a market crash, but so far, local data don&#x27;t support that claim.

Local experts predict 2023 will bring more normalcy to the Des Moines-area market. Here's what they're saying.

The market will more closely resemble that of pre-pandemic 2019, forecasts realtor Erika Hansen with Coldwell Banker Mid-America. 

Housing inventory will incrementally increase over time, predicts broker Ted Weaver with RE/MAX Concepts. Prices will stabilize, with the pace of price increases slowing considerably, Weaver says.

"Time on market to sell a home will revert back to more 'normal' times, and interest rates, while higher than recent years, should stabilize," Weaver tells Axios.

This year will serve as the bridge back to a more robust housing market in 2024, Weaver says.

"We're entering a bit of a recovery phase right now," says broker Jen Stanbrough with Jen Stanbrough Real Estate. "We're back to an even market — it’s not a seller’s market or a buyer’s market."

Those market shifts will give buyers a chance to breathe and take their time, Stanbrough tells Axios.

Over the summer, Stanbrough recalls going into houses where there may have been 15 other people looking at a house or waiting on the doorstep.

"I had to tell my clients, ‘If you want this house, you have to make an offer today,'" she says. "We saw a lot of buyer's remorse. We're not seeing that now."

Des Moines' 2023 real estate predictions

Stay chill. Des Moines' real estate market is cooling, not crashing.

Illustration of the year 2022, with a keyhole for a zero, which zooms in so you can see through the keyhole to the year 2023.

Local experts predict 2023 will bring more normalcy to the Des Moines-area market. Here&#x27;s what they&#x27;re saying.<h5>1. Conditions will be less frenetic.</h5>

Business

Spend a peaceful weekend in Mason City, home of  Music Man Square and “Stockman House” designed by Frank Lloyd Wright.

Here's what to do and where to eat, drink and stay.

No two rooms are alike in the last remaining hotel designed by renowned architect Frank Lloyd Wright.

Features: 27 guest rooms of varying shapes and sizes, guided tours about the building's history and renovation, on-site bar and restaurant

Relax in this cozy cabin that blends modern updates with rustic charm.

Features: Fully stocked hickory kitchen, smart TV, free driveway parking, washer and dryer, Wifi, patio

updated kitchen with stainless appliances

Treat yourself to fresh seafood and top-quality steak at this inviting spot that boasts a breezy patio.

This basement bar is a gathering spot for locals and visitors alike, with billiards games, pop-up live music and $5 burger night on Wednesdays.

Address: The basement of Historic Park Inn at 15 W. State St.

lower level bar at Historic Park Inn Hotel

Grab a scoop at this iconic ice cream shop that's been in the same Mason City location since 1931.

Summer hours: Monday-Friday 12pm-10pm, Saturday and Sunday 11am-10pm

Non-summer hours: Tuesday-Friday 4pm-9pm, Saturday and Sunday 12pm-9pm

Experience the life and works of Meredith Willson, the Mason City native best remembered for his Broadway musical "The Music Man." Admission is $10 for adults or $5 for students.

Get a first-hand view of Frank Lloyd Wright's architecture and his impact on Mason City. Tours cost $10 per person.

Tour times vary seasonally. Check the website for updated information.

Sip small batch beer while you partake in free trivia nights or enjoy live music and comedy events. Check the schedule.

Hours: Wednesday and Thursday 5pm-10pm, Friday 5pm-11pm, Saturday 2pm-11pm

Where to eat, stay and play in Mason City, 2 hours from Des Moines

The Historic Park Inn Hotel. Photo: Jim Kruger

Travel

Spend a peaceful weekend in Mason City, home of Music Man Square and “Stockman House” designed by Frank Lloyd Wright.<ul><li>Here&#x27;s what to do and where to eat, drink and stay.</li></ul>

Sami Sparber

Featured stories

Des Moines rents are cooling off

Des Moines' 2023 real estate predictions

Buying a house in Des Moines is finally easier, but not cheaper

Where to eat, stay and play in Mason City, 2 hours from Des Moines

Des Moines' real estate market is shifting, slightly