Secured by the third lowest foreclosure rate in the country, less speculative home buying and healthier employment, Iowa housing markets are rising from the financial crisis, despite weak conditions in the agricultural industry.
More than half of all employment in Iowa is tied to farming, which has been battered by the economic downturn. Job lay-offs in agriculture climbed as the economy deteriorated and threatened to undermine real estate markets. But the first time buyers’ tax credit pushed markets to improve increasing home sales. The improvement may be enough to send Iowa housing markets on a path to recovery.
Few foreclosures impact the market in Des Moines. Combined with lower home prices, sales of single family homes have climbed in Des Moines even as prices decline. Nearly 40% of all sales are to first time home buyers, and the expansion of the federal program to move-up buyers is likely to improve sales in the first half of the year, which is normally quieted by cold winter snows.
Eager buyers should be anxious to close before the incentive disappears. Des Moines average housing prices are forecast to appreciate 5.7% in 2010.
In Cedar Rapids the market is also making strides towards recovery. The highest number of homes to sell in a decade sold in October. River flooding riddled the community a year ago causing millions of dollars in crop damage, but housing prices remained steady following the flood and did not set off a crash in the market.
With the expansion of the tax credit to move-up buyers, the market should gain momentum moving into the winter with higher sales. Cedar Rapids homes prices are forecast to rise 3.4% by year’s end.
Home sales in Iowa City have been marginally slower. However, the number of days it’s taking to sell a home has dropped, which is likely to be an omen of better things to come for the market. Home sales should improve with the expansion of the tax credit. Average Iowa City houses are forecast to inflate 3.1% in 2010.
In Sioux City the tough economy has sent more residents into the unemployment lines. The hurting economy is also causing more homeowners to walk away from their mortgages and for the first time in decades Sioux City is dealing with foreclosures.
Bankers are slashing prices to get properties sold. Despite its troubles, Sioux City is holding up and should see improving home sales in the early part of the year. Sioux City is forecast to see average home prices increase 2.8% for the year.
The Davenport housing market has seen strong sales during most of the nationwide downturn. Home prices remain at some of the lowest in the state, which should aid the market in pulling out of the national financial crisis. As credit markets stabilize and banks offering mortgages more freely the market is projected to see home sales rise. Davenport home values are forecast to appreciate 4.2% in 2010.