Des Moines Real Estate Blog

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  • 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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Home Prices, Leading Indicators, & Employment… Oh My!

Posted by adamvanlin on September 8, 2011

Catching up after a long weekend and some unhealthy procrastination.

Let’s start with home prices.  Des Moines median home prices shot up over $4,000 over the past month to $148,608.  This is a 4.6% increase from a year ago.  The yearly growth rate (average yearly rate for the past 12 months) finally turned positive.  We can definitively say that over the past year, home prices in Des Moines have risen!  On average, August is typically the final month we see home price increases before the cold weather effect sets in, so we’ll probably see values head down starting in September.   That’s why it’s more important to keep an eye on the yearly growth rate as it’s a better barometer of “real” (adjusted for seasonal effects) housing prices.

Next up, Employment.  Employment leads home prices, so this gives us a good idea of where prices are headed.  The unemployment rate dropped from 6% to 5.7% in July.  That’s the good news.  However, then number of people employed was 302,219, a slight decrease from a year ago.  The overall employment numbers are still trending down, which means the number of employed individuals in Des Moines is slowly decreasing.  Not a great sign for the housing market, but not dire either.  There are plenty of cities worse off when you compare their employment situation to Des Moines.

And finally…  The Iowa Leading Indicators Index has stalled over the past 6 months, coming in at 104.83, a modest 0.12 increase from a month ago.  The yearly growth rate has “fallen off the cliff” over the past couple months after 16 months with over 4% yearly growth.  We are now down to 1.7% and falling.

BIG PICTURE:  The leading indicators had been on an upward trend for about 2 years.  Employment & home prices soon followed and are about 1 1/2 years through their upward projection path.  With the leading indicators “turning over” the past couple months, I would expect the relative strength we’ve had in employment and the housing market to stagnate in or around February of next year.  The question is, in February, will prices head lower, or will we see them even out for a while?  We’ll have to keep an eye on the next couple months of data to answer that question.

For a private consultation on your real estate needs, give me a call today at 515-344-1068.


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