Learning from Experience
Des Moines’ own Stat Guy shares his annual predictions.
Late last month, the Des Moines Area Association of REALTORS® Young Professionals Network (YPN) hosted its Annual Market Update brunch in West Des Moines. Once again, Des Moines’ self-proclaimed Stat Guy, Les Sulgrove, donned his fortune teller hat to share his assessment of 2024 and his predictions for 2025.
Sulgrove is in his 35th year as a licensed REALTOR®. That experience serves him well as he gathers and evaluates a variety of real estate statistics from across the state. His fascination with those statistics led to the establishment of his website, DesMoinesMarketValues.com, as well as a YouTube channel with weekly shows about the latest activity around the metro.
“Oscar Wilde said, ‘Experience is the hardest kind of teacher. It gives you the test first and the lesson afterward.’ So all of you get to benefit from my experience,” he said.
Clearly, Sulgrove has learned what it takes to understand market trends and the needs of Iowa homebuyers. His record on hits and misses for 2024 was on the winning side, hitting 71% of his predictions.
“Admittedly, some of my predictions were softballs so I could be sure to get something right,” he joked. But he was on target in five of his seven categories, just missing the target in the other two.
As he announced at last year’s YPN event, inventory never reached 4,000 units. Sales were actively affected by interest rates. Days on market increased. Months of inventory (MOI) was often determined by properties available under $400,000. And homeowners that had been sitting on the sidelines finally started entering the market again the second half of the year.
Unfortunately, rates didn’t stabilize in the 5.5% range, as Sulgrove had hoped, which may have played into the missed prediction regarding total closed sales. “I said closed sales would surpass 2023 numbers, and that didn’t happen,” Sulgrove said. “We just missed that number. But we did see an uptick in closings after the first of the year, which I see as a win.”
Sulgrove’s look at the 10-year real estate cycle was a highlight of the presentation, tracing sales activity back to 2000.
“That 10-year cycle isn’t a firm timeframe. But it’s historically been the case that the real estate market goes from expansion to peak to slowdown to recovery and then back to expansion again,” he explained. “We were actually on that timeline, and then COVID-19 hit.”
Because of that anomaly in the housing market and the economy as a whole, Sulgrove says the anticipated slowdown, which would normally have taken place around 2019, turned into an extended peak followed by another expansion. That slowdown finally came in 2023 in a big way.
“Looking at the numbers from last year, I’m hopeful that 2024 was the start of the recovery phase,” he said. “We saw inventory numbers coming up, and demand has slowed to a more normal pace. I’m predicting that 2025 will be the start of an expansion phase.”
One of the priorities for REALTORS®, he said, will be finding ways for properties to qualify for VA and FHA financing. “If we want to create opportunities for first-time buyers to get into the market, finding ways to help them get financing is going to be key. VA and FHA financing are a huge part of that.”
Another element that seems to be on the rise is the number of open houses. “For quite a while, we only saw open houses for new construction, but that’s been changing. We’re seeing a lot more open houses in general, and the number of open houses for resale properties has increased noticeably the past several months,” Sulgrove said.
Along with financing options and marketing tools, Sulgrove said the factor that has the most dramatic effect on nearly every statistic he tracks is the list price of the home. “Pricing a property correctly up front has a major effect on everything from days on market to final sale price,” he said. “In 2024, homes that sold in the first two weeks of listing sold at 99% of listing price. Homes that stayed on the market more than 90 days typically sold for less than 88% of listing price.”
Sulgrove said it was clear that properties priced competitively from the outset were not only likely to sell quickly, but they were more likely to sell at or near the asking price.
With that advice in mind, Sulgrove put his fortune teller cap back on and made his predictions for 2025:
- For sale inventory will cross the 4,000 mark but struggle to go much beyond that.
- Pending sales will gain momentum with steady growth.
- Closed sales will rebound and exceed 2024 numbers.
- Days on market will align with 2024 numbers, with no return to COVID numbers in the foreseeable future.
- Months of inventory will rise for properties in the highest price categories but improve for properties under $500,000.
- Mortgage rates will stabilize between 5.5% and 6.5%.
Tune in next year to see if Sulgrove beats his 71% success rate. And to tap into his market savvy on a regular basis, tune in to his YouTube channel and his website each week.
Learn More.
To view Sulgrove’s slide presentation from the YPN event or any of his weekly YouTube videos, visit DesMoinesMarketValues.com.