Experts say the Iowa residential market is hotter than a gun

0
38

[ad_1]

One of the buyers, Jill Monnahan, placed offers in six different homes in the Cedar Rapids area.

A “Pending Sale” sign was posted outside the house on the southeast side of Cedar Rapids on Thursday, June 3, 2021. A perfect storm of market conditions has created a buzz in the real estate market. (Rebecca Miller / The Gazette)

“And they still don’t have a home,” said Monnahan, a realtor at Skogman Realty and president of the Cedar Rapids Area Association of Realtors.

This is part of what experts have called the area’s historically seller-friendly residential property market.

Art Cox, director of the Real Estate Education Center at the University of Northern Iowa, described the market as a “hot gun.”

“Things seem to be selling very, very quickly,” Cox said.

“It seems to me that sellers and their real estate agents are setting list prices that they thought would have been too high six months or a year ago.”

Monnahan, who has worked as a licensed real estate agent in Cedar Rapids for over two decades, said she sees many “improbabilities” in the market.

According to the Iowa Association of Realtors, in April 2021, a single-family mansion in Lynn County had an average of 23 days on the market before being sold. That’s almost half the number of days – 44 – it took to sell in April 2020.

The county had 0.6 months inventory in April, according to the Iowa Association of Realtors. A balanced real estate market usually has five to six months of inventory.

“I really want my clients to get into the house on the very first day it is on the list,” Monnahan said.

Waiting, Monnahan added, carries risks, even if the seller plans to give buyers time to create offers.

“You never know what this salesperson might decide,” Monnahan said. “Even though they say, ‘Hi, this is on the list today, but we will not consider proposals for three days,’ they could change their minds. Nothing connects them with this statement. “

This does not give buyers a lot of time to inspect the home before submitting an offer. Monnahan said she encourages buyers to focus on home layout, electrical panel, and other things that aren’t easy to change.

“Cosmetic things can be changed,” Monnahan said.

“Many of these buyers, who are now under contract, visited their home once, maybe half an hour,” Monnahan said.

Scheduling multiple offers

Johnson County also has a vendor market, although the Iowa Association of Realtors’ statistics are not as dramatic as those in Lynn County.

Single-family homes spent an average of 53 days on the market prior to being sold, and county stocks are 2.3 months.

In Lynn and Johnson counties, selling prices are rising as demand remains high and supply remains low.

Johnson County’s median selling price rose 17.3 percent from April 2020 to April this year. The median selling price in Lynn County increased 14.3 percent during this period.

“Sellers today, if they bought their home two years ago, five years ago, they will definitely see a significant increase in the value of their home,” Monnahan said.

Monnahan encourages buyers to look for homes that are not necessarily listed in the maximum human price range in the event of a bidding war.

“You have to assume there will be multiple proposals,” Monnahan said.

UNI’s Cox said the seller-focused market extends well beyond Iowa.

“It’s everywhere,” Cox said.

The nationwide inventory of single family homes in April was just over two months old. according to the National Association of Realtors

Nationwide, sales of existing homes fell 5.85 million units year on year – 2.7 percent – from the previous month, according to the National Association of Realtors and CNBC.

This drop was due to limited supply and higher supply prices in some markets.

The relative ease of getting a mortgage is driving demand, Cox said. The average weekly interest rate on Freddie Mac’s 30-year fixed-rate mortgage was 2.95 percent as of May 27.

That’s not as low as when it stood at 2.65 percent in January, but it is significantly lower than the 4.56 percent figure for the week ended May 31, 2018.

“More and more people are starting to think, ‘Well, now we’re starting to see inflation, so interest rates are likely to go up,’ Cox said.

“‘We’d better move now.”

Comments: (319) 398-8394; john.steppe@thegazette.com

A “Pending Sale” sign was posted outside the house on the southeast side of Cedar Rapids on Thursday, June 3, 2021. A perfect storm of market conditions has created a buzz in the real estate market. (Rebecca Miller / The Gazette)



[ad_2]

Source link