Good News for Urbandale's Housing Market

Think the housing market stinks right now? Think again.

Urbandale building officials, a local Realtor, and the director of a homebuilders group all say home construction and buying is on the rise here.

Consider these statistics:

• Last year, Urbandale had its best year since 2008 for residential building permits. Nearly $88 million in value was added through residential construction or remodeling. That's up from $70 million in 2010 and $49 million in 2009, according to a city report on building permits.

Paul Dekker, director of Urbandale's Community Development department, said that barring any drastic economic event, he expects homebuilding to continue this year on par with 2011.

• Urbandale issued 177 building permits for single-family homes last year. That was the second-highest number, behind Ankeny, in the metro area last year, said Creighton Cox, an Urbandale city councilman and executive officer of the Homebuilders Association of Greater Des Moines. 

"Last year Urbandale was third and the year before that, they were sixth," he said.

Signs of Life in Economy, Housing Market

By comparison, 2005 was the height for housing construction, with 432 permits and 2008 was the nadir with just 97 permits issued in Urbandale, he said.

• If you're a buyer, this is a great time to buy, said Marva McCarty, an Urbandale Realtor who sells for ReMaxx and Associates in Windsor Heights. And if you're a seller, there are indications that home prices are on the way up. 

That's because the supply of homes is down and prices are down but the demand is increasing.

In Urbandale specifically, 444 homes were sold between March 1, 2010 and Feb. 28, 2011. The average price was $245,518, she said.

For the same period ending this February, just 11 more homes were sold and the average price was $247,720, McCarty said.

"I do know that our inventory is the lowest it's been since 2005 or 2006. … The selection is much much smaller than it has been in the last two to three years compared to the number of buyers out there putting an offer on a house," she said. 

"Prices have gone down slightly; inventory is down and pending sales are up, so those are good signs," she said.

When supply is lower than demand, that generally raises price, she said.

Urbandale's Housing Inventory Shrinking

Dekker, the city planning director, said one factor that may affect how many homes are built in the coming years is whether there are developers to plat land and create the lots that are sold to homebuilders. 

Two of the largest developers — Regency and John Kline — went under during the recession, he noted.

Urbandale had a surplus of developed lots when the housing market plummeted in 2008, so building continued even though there weren't new developments being created.

That supply of lots has shrunk, but in the past six months, Urbandale has received and approved a few smaller development plans. However, Dekker said, bankers still seem to reluctant to finance developments much over 30 homes, which may affect the size of new housing subdivisions.