The Des Moines Real Estate Market: Stats & Trends for 2021

Investors looking for single-family homes for sale in Des Moines should plan on acting fast. The median sales price of a home in Des Moine has increased by nearly 17% while the days on market until sale are down to 39, according to the most recent local market update from the Iowa Association of Realtors.

One of the reasons why the housing market is steady and stable is because the market is more rural. As Forbes notes, markets that aren’t as urbanized are faring better in terms of housing activity.

Des Moines is the capital of Iowa and is located along the banks of the Des Moines River. Founded back in 1843 as a coal mining town, the city quickly became the largest in the state. Today, Des Moines is the third-largest spot for insurance companies in the world and is home to the headquarters of financial corporations including Wellmark Blue Cross Blue Shield, EMC Insurance Companies, and Principal Financial Group.

One of the first caucuses of the presidential primary cycle takes place in Des Moines, with the New York Times describing the city as the perfect place to watch politics in a close-up and intimate setting. Over the last several years Des Moines has been ranked as the best place for business and the wealthiest city in America.

Keep reading to learn why investing in the Des Moines real estate market is worth considering in 2021.

 

Population Growth

Des Moines and the city’s suburbs have accounted for 50% of the population growth in the entire state of Iowa since 2010. According to the Des Moines Register, several suburbs in Des Moines – including Waukee, Ankeny, and West Des Moines – have boomed by between 48% and 74%. In fact, while a large majority of towns in Iowa have lost residents, Des Moines just keeps on growing.

Key Population Stats:

  • Des Moines is the largest city in Iowa with a population of more than 203,400 in the city and more than 699,400 residents in the Des Moines-West Des Moines metropolitan area.
  • Metro area of Des Moines consists of Polk, Dallas, Warren, Madison, and Guthrie counties.
  • Suburban communities in the Des Moines metropolitan area include Altoona, Ankeny, Bondurant, Norwalk, Pleasant Hill, Waukee, and West Des Moines.
  • Population growth in Des Moines is 1.47% year-over-year.
  • Over the last 10 years, the population of Des Moines has grown by 7.1%.
  • Des Moines is the fastest-growing city in Iowa and one of the fastest-growing major cities in the Midwest.
  • Unemployment in Des Moines is down to 3.3% (as of Oct. 2020).
  • Employment growth in Des Moines was 1.4% last year with a metro area cost of living 7% below the national average.
  • Median age in Des Moines is 36.5 years, making the market perfect for renting to millennials.

 

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Job Market

Over the past decade, the number of high-tech jobs in Des Moines has increased by nearly 60%, faster than traditional big-city technology centers such as Seattle, Boston, and Portland. Midwestern “Heartland” cities like Des Moines are attracting and keeping millennials at higher rates due to the low cost of living, high-tech job growth, and sense of community.

As the economy begins to recover, the employment sectors showing the fastest signs of growth include financial activities, information technology, manufacturing, and professional and business services, according to the BLS.

Key Employment Stats:

  • GDP of the Des Moines-West Des Moines MSA is more than $52.2 billion, according to the Federal Reserve Bank of  St. Louis, and has grown by more than 59% over the last ten years.
  • Job growth rate in Des Moines was over 1.4% year-over-year with a current unemployment rate of 3.3%.
  • Median household income in Greater Des Moines is more than $71,164 while per capita income is $37,042.
  • Forbes ranks Des Moines as the 10th-best place for business and careers, with high rankings for cost of doing business, education, and job growth.
  • Key industries in the Des Moines metro area include advanced manufacturing, agbioscience, data centers, insurance and financial services, logistics, and technology.
  • Region’s high concentration of agriculture and biotech companies, plus the region’s access to prime farmland and a talented workforce, have earned the nickname “America’s Cultivation Corridor.”
  • Facebook and Microsoft have strategic data operations centers in Des Moines.
  • More than 80 insurance companies are located in the Des Moines metro area, creating the highest concentration of employment in insurance and financial services in the U.S.
  • Major non-government employers in Des Moines include Wells Fargo & Company, UnityPoint Health Partners, Nationwide insurance, John Deere companies, Cortiva Agriscience, Pella Corporation, MidAmerican Energy Company, Tyson Fresh Meats, and Drake University.
  • Mercy College of Health Sciences, Grand View University, and Drake University all have their main campuses in Des Moines.
  • More than 93% of the residents in the Des Moines metro area are high school graduates or higher, and 38% hold a bachelor’s or post-graduate degree.
  • Des Moines is located only a few hours by car from Minneapolis, Chicago, St. Louis, Kansas City, and Omana, Nebraska.
  • Located at the crossroads of Interstates 80 and 35, Des Moines is a prime location for logistics, warehouse, and distribution facilities.
  • Des Moines International Airport (DSM) provided service to nearly 3 million people last year with non-stop flights to cities such as Atlanta, Phoenix, Denver, Washington D.C., Dallas, Los Angeles, and New York.

 

Real Estate Market

Des Moines is still a more affordable market to invest in compared to many parts of the country, which is why the real estate market in Des Moines is surging even in the middle of a recession. According to one local news station, homes on average are selling in 46 days from list to close, and buyers are paying nearly 7% more for a home in Des Moines than they did just one year ago.

Key Market Stats:

  • Zillow Median Home Value Index (ZHVI) for Des Moines is $171,332 (as of June 2021).
  • Homes values in Des Moines increased by 12.5% over the last year.
  • Over the last five years home values in Des Moines have increased by over 36%.
  • Median listing price for a single-family home in Des Moines is $184,900 based on the most recent report from Realtor.com (June 2021)
  • Median listing price per square foot is $162.
  • Median selling price for a single-family home in Des Moines is $185,000.
  • Days on market (median) is 50.
  • Sales-to-list price ratio is 100%, meaning that homes are selling for approximately the full asking price.
  • Of the 60 neighborhoods in Des Moines, Southwestern Hills is the most expensive with a median listing price of $355,500.
  • Fairground is the most affordable neighborhood for homebuyers in Des Moines with a median listing price of $121,000.

 

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Attractive Renters’ Market

Des Moines is ranked by WalletHub as one of the best cities for renters, with the city receiving good scores for the rental market, affordability, and quality of life. Last year, HousingWire recently reported that Des Moines ranks just 70th place in the country for a high cost of renting, even though the rental market here had the fastest growth rate for one-bedroom units.

Key Market Stats:

  • Average rent in Des Moines is $927, according to the most recent research from RENTCafé (as of October 2020).
  • Rents in Des Moines have increased by 3% over the past 12 months.
  • 54% of the housing units in Des Moines rent for between $701 and $1,000 per month.
  • Renter-occupied households make up 43% of the total occupied housing units in Des Moines.
  • Most affordable neighborhoods for renters in Des Moines include Oak Park, Highland Park, and Union Park where rents are $640 or less per month.
  • Downtown Des Moines, Historic East Village, and Sherman Hill are three of the most expensive neighborhoods in Des Moines for renters, with monthly rents of about $1,145.
  • Popular neighborhoods in Des Moines for renters include Downtown Des Moines, Capital East, and Meredith.

 

Historic Price Changes & Housing Affordability

Reviewing the historical change in home prices and the affordability of housing in a market are two ways investors can forecast the potential appreciation and demand for rental property looking forward. 

The Freddie Mac House Price Index (FMHPI) measures the typical price inflation for houses in the U.S. Freddie’s HPI uses December 2000 as a benchmark of 100, then compares the increase in housing prices in each state and metro area to 100.

The most recent FMHPI for the Des Moines-West Des Moines MSA shows that:

  • May 2016 HPI: 134.9
  • May 2021 HPI: 177.6
  • 5-year change in home prices: 31.7%
  • One-year change in home prices: 12.0%
  • Monthly change in homes prices: 1.1%

The editors of Kiplinger’s Personal Finance publish regular reports showing home prices in the 100 largest metro areas. Real estate markets are ranged on an affordability scale of 1 to 10, with 1 being the most affordable place to buy and 10 being the least affordable.

The affordability index report for Des Moines shows:

  • Since the last real estate cycle market peak in May 2006, home prices in Des Moines have increased by 26.1%.
  • Since the last real estate cycle market bottom in March 2012, home prices in Des Moines have increased by 45.0%.
  • Des Moines has an affordability index of 3 out of 10, meaning that Des Moines is one of the most affordable markets in the country to buy a home.

 

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Quality of Life

Des Moines is ranked by U.S. News & World Report as the 7th-best place to live and the 42nd-best place to retire in the U.S. The publication admits that the flyover state may not be a top tourist attraction, but the city is a great place to live for singles, couples, and families.

Key Quality of Life Stats:

  • Cost of living in Des Moines is 7% below the national average, according to Forbes.
  • Des Moines receives high rankings from Niche.com for diversity, nightlife, family living, housing, and public schools.
  • The city has a dense suburban feel, with parks, coffee shops and bistros easy to find.
  • Climate is humid continental with warm to hot summers with a lot of humidity and cold, snowy winters with an average snowfall of 35.3 inches per season.
  • Iowa’s cultural center is located in Des Moines, with numerous art and history museums, and performing arts groups calling the city home.
  • Greater Des Moines Botanical Garden is an indoor conservatory with one of the largest collections of tropical, subtropical, and desert-growing plants in the Midwest.
  • More than four miles of enclosed walkway make the Des Moines Skywalk System in the central business district one of the largest in the U.S.
  • MercyOne is ranked as the #1 hospital in Des Moines and the 2nd-best in Iowa by U.S. News

 

Get Out the Map

Where to begin your search? Roofstock created a heat map of Des Moines based on our Neighborhood Rating, a dynamic algorithm that enables you to make informed investment decisions by measuring school district quality, home values, employment rates, income levels, and other vital investment criteria.

DARK GREEN: 4-5 star neighborhood
LIGHT GREEN: 3.5-4 star neighborhood
YELLOW: 2.5-3 star neighborhood
ORANGE: 2 star neighborhood
RED: 1 star neighborhood

Ready to invest in the Des Moines housing market? If you haven't already done so, create your free Roofstock account and set up alerts. We'll notify you when we have a Des Moines investment property that matches your search criteria.

 

 

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This article, and the Roofstock Blog in general, is intended for informational and educational purposes only, and is not investment, tax, financial planning, legal, or real estate advice. Roofstock is not your advisor or agent. Please consult your own experts for advice in these areas. Although Roofstock provides information it believes to be accurate, Roofstock makes no representations or warranties about the accuracy or completeness of the information contained on this blog.
Jeff Rohde

Author

Jeff Rohde

Jeff has over 25 years of experience in all segments of the real estate industry including investing, brokerage, residential, commercial, and property management. While his real estate business runs on autopilot, he writes articles to help other investors grow and manage their real estate portfolios.

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