From The Des Moines Register, February 23, 2008

Iowa home sales drop 3% in 2007

Home sales across the state fell about 3 percent last year over 2006, a new report shows, while the statewide median sale price was flat.

Iowa home sales dropped to 37,534 last year from 38,674 in 2006, an Iowa Association of Realtors' report shows. Last year's median home sale price was $128,750, $550 more than in 2006.

Sales nationally have fallen, too: Existing-home sales were down about 13 percent in 2007 and new-home sales dropped 26.4 percent.

In Des Moines, the number of homes sold last month fell 20.2 percent to 463, a separate report from the Des Moines Area Association of Realtors showed.

Despite slower sales, the average sale price in the Des Moines area climbed about 5 percent, or $8,301 to $175,086, from a year ago, the group said.

In January, Des Moines' pending sales, an indication of future activity, dropped nearly 22 percent to 515 from a year ago. And total sales volume fell 16 percent - or $15.7 million - to $81.1 million compared with a year ago.

This year's slow beginning was an improvement on December, when sales tumbled 31 percent to 532.

Cold weather and speculation that interest rates would tick lower kept buyers on the sidelines, real estate officials said.

Last month matched 1999 as the coldest January on record since 1997, Harry Hillaker, the state climatologist, said in a summary of weather activity.

"Some weekends, weather stopped open-house traffic," said Joanne Mangold, manager of Iowa Realty's Altoona office.

But, she added, buyers also are waiting to see where interest rates land.

The Federal Reserve cut key rates twice in January to calm turbulent markets and boost the economy.

The 30-year fixed-rate mortgage averaged 6.04 percent this week, Freddie Mac, the mortgage company, said. It was up from 5.72 percent last week but lower than 6.22 percent a year ago.

Buyers also might be watching changes to federal lending limits that should make it easier for good borrowers to get loans, Mangold said.

She said buyers shouldn't wait too long. "People have heard it's a buyer's market and think they have all the time in the world to get the best deals. But inventories are tightening," she said, pointing to October, when nearly 6,900 homes were on the market.

January had 6,424 homes listed, flat compared with a year ago, the report showed. Homes were on the market an average of 90 days, four days less than last year.

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