Des Moines Real Estate Blog

Your Economist of Choice, Your Realtor of Choice

  • Adam Van Lin, Realtor
    Burnett Realty
    10200 Hickman Rd. #100
    Clive, Iowa 50325
    Cell 515.344.1068
    Fax 515.331.3401
    Licensed in Iowa

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The Seasonal Drop in Prices Begins

Posted by adamvanlin on August 3, 2011

This won’t be the most upbeat post I’ve written, but it’s one of the more important ones.  Sometimes the truth hurts, but if you have information on your side, you will make better decisions.  Lets get to it…

History tells us that in Des Moines, the prices of homes drop an average of 8.8% from the warm weather months to the cold weather months.  So when does this precipitous drop start to occur?  Answer: Now.

It makes sense.  Someone walks into a home last month in their shorts, full of vitamin D from the sunshine, sees the pool in the backyard, and says, “This is it!”  That same person walks into the same home in January, shakes the snow from their snow pants, removes their wet boots, and says, “I’ll hear pools are hard to take care of.  Cross it off the list.”

What does this mean for sellers?  In short, the value of your home has started to drop, and will continue to drop into the cold, snowy, winter months.  If you have an offer on the table, you can assume it will be the best offer you will get for a while.  If you don’t have an offer on the table, you might consider lowering your price, or marketing more aggressively, to get someone to pull the trigger sooner, rather than later.

And if you’re a buyer?  If you can wait, you should.  It doesn’t make sense to buy something that will drop in value, especially such a large purchase like a house.  Of course, many things will affect your decision.  If you have another house to sell, you’re buying and selling at the same time, so it evens out.  Maybe you are getting a home for 10% below market value, and can withstand the oncoming drop in price.  Consider all the factors involved and make a great decision.

I will be posting home prices for July on Friday, including appreciation rate and months of supply.

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