Multifamily Per-Unit Prices in Des Moines on the Rise to Start 2025

Property performance in the Des Moines multifamily market was mixed during the first quarter, as rents inched higher while the vacancy rate continued to rise. The pace of multifamily completions accelerated as projects totaling more than 400 units came online after development was limited at the end of 2024. Supply-side pressures continue as multifamily inventory in Des Moines has expanded by roughly 10% since the beginning of 2023, but this should begin to fade, and the development pipeline has contracted significantly during the past two years. Vacancy has trended higher throughout the past 18 months, reaching 6.1%. Current vacancy conditions and trends are closely tracking levels recorded in 2018 and 2019, during a period where multifamily deliveries were also elevated.

Sales velocity slowed in the opening months of 2025 after transaction volume was elevated during 2024. With a few exceptions, investment activity in Des Moines has been mostly steady in recent years, with middle-tier and lower-tier garden-style apartments accounting for the bulk of the transactions. While the sales mix has been constant, pricing has adjusted higher during the past 12 months. The median price during the past year is $89,300 per unit; median prices ranged from $77,000 per unit to $79,000 per unit from 2022 to 2024. The recent increase in pricing can be attributed to higher prices among Class B assets. The median price for Class B properties during the past year was $142,900 per unit, up from $87,800 per unit in 2022 and $96,050 per unit in 2023.

Looking ahead

While inventory growth in the Des Moines multifamily market was steady in the opening months of the year, the pace of multifamily deliveries is projected to taper off in the coming quarters, with completions forecast to be below trend in 2025. Slowing supply growth should allow for vacancy to stabilize at around 6%, and the rate is likely to begin to improve in subsequent years, returning closer to the region’s long-term average of 5.3%. The recent contraction of the development pipeline bodes well for property fundamentals. Current construction levels are below the region’s traditional norms, and permitting was stable in 2023 and 2024. Renter demand is expected to remain healthy, as Des Moines has been the fastest-growing metro area in the Midwest since 2020, with a growth rate that has doubled the national figure. The region’s population expanded by 6 percent during this time frame.

Sales activity in the local multifamily investment market is expected to remain limited in the coming quarters. Historically, transaction volume in Des Moines has been driven by smaller deals, as more than 60% of the properties that changed hands since 2014 have been for less than $10 million. Less expensive deals may be tougher to complete in the immediate future, as the current climate of elevated interest rates may stifle buyers pursuing these types of transactions. The trend could reverse course if interest rates taper off and stabilize in the second half, sales velocity is expected to return to normal levels. In the interim, larger transactions will likely make up the bulk of sales in 2025, and overall volume should lag traditional norms.

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