As the real estate market transitions, it’s important to remember that real estate markets are localized. Recently, national news headlines have revolved around housing prices declining and an impending “crash.” Thankfully, the Ames housing market is unlikely to experience any sort of crash. In general, more normal conditions are emerging for both buyers and sellers.
During the mortgage crisis from 2008-10, Ames’ home values remained steady or even slightly appreciated. They did not decrease. The number of homes sold during that time did diminish, but the values held steady. While national trends indicate that housing prices may fall, Ames’ statistics indicate that our homes’ values will continue to increase — just maybe not at the rate we’ve seen over the last two years thanks to market normalization, which is a good thing for a healthier market.
Sales will ease a bit and inventories will increase modestly in view of the economic pressures including increasing interest rates, and a gradually improving supply chain environment allowing builders to deliver more new homes to market.
Until those things are realized, Ames is still experiencing low inventory, which has continued to drive a competitive market for buyers. That competitiveness pushes home prices up and days on market down, both of which we saw in June. The median home sale price was at $285,000 and the median days on market was at six days. The month of May saw 96 new listings — a two-year high, but June introduced just 70 houses to the market. Meanwhile, 86 houses were sold in June and the number of active listings dropped down to 63 houses.
Interest rates rose again in June, which eliminates some buyer activity and increases inventory. However, buyers still outnumber sellers making selling a worthwhile endeavor. Days on market, particularly in higher price ranges (plus $500K), is beginning to grow, leading to pocket price reductions—a positive trend for buyers.