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Iowa
Battered by one of the highest foreclosure rates in the country, Iowa is facing a severe down turn in its housing markets. Nearly one in fifty home mortgages are in trouble.
Housing markets all over Iowa are feeling the impact of a boom that’s gone bust. Sales have slowed and prices are slipping. As a result, the Iowa economy is ailing and may already be in a full-fledged recession.
However, Iowa’s economy is heavily dependent on agriculture as one of the top corn producing states in the nation. Farm land prices have taken a huge jump. Corn prices have doubled as a result of the growing ethanol business and the state’s agriculture producers are looking forward to a strong year. Farming is strengthening the Iowa economy, but not enough yet to help its real estate markets.
In Des Moines, which is the state’s largest city, housing sales have slowed. Foreclosures are climbing as adjustable rate mortgages reset and many home owners are finding themselves unable to afford the higher payments. The collapse of the subprime mortgage market is having a major impact as prices fall.
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| City |
Forecast |
| Des Moines |
− 8.4% |
| Cedar Rapids |
− 7.6% |
| Davenport |
− 7.9% |
| Iowa City |
− 7.8% |
| Sioux City |
− 6.9% |
Housing Predictor forecast that Des Moines will have slower sales in 2008 amid worsening foreclosures on the way to deflation of 8.4% in average housing values.
In Cedar Rapids homes are being left vacant by owners, who can no longer afford the mortgage and are unable to refinance as a result of the deflating market. Iowa had experienced all-time record high housing prices before lenders tightened mortgage guidelines, sending the market into a slow, but severe slowdown.
Another tough year is ahead for the Cedar Rapids real estate market, which is forecast to deflate 7.6% in average home values.
The University of Iowa is in Iowa City, which produced a booming housing market during the national real estate frenzy. Many parents of college students bought homes as investments for students attending college only to see the market stall. A surplus inventory of homes listed for sale now chills the market, and housing values are declining.
Many parents of students just want to sell their homes to get out of the market place before things worsen. Foreclosures are increasing and prices are forecast to depreciate 7.8% by year’s end.
Over in Davenport the farming business is at least healthy. But home owners facing foreclosure are looking for alternatives, and many are leaving the state for warmer climates, which has one of the lowest state populations in the country.
The mortgage crisis is making a heavy impact on the Davenport economy as more home owners lose their homes. Davenport housing is forecast to deflate 7.9% in value by the year’s end.
Mortgage payments are also getting tougher for many people to make in Sioux City, where prices are declining and are forecast to be 6.9% less by the end of the year.
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