Iowa Housing Market 2023 Report
What’s the Iowa Housing Market Like?
Home prices in Iowa have appreciated 61.4% lower than the national level from last year. Looking back three years at the median price in Oct 2019 compared to Oct 2022, prices have increased 17.1% in Iowa VS 35.8% nationwide.
As of Oct 2022, the median price for a home in the state was $218,400, which is up 1.5% above last year’s median price. Comparing prices over the last three years, we can see they have decreased -11.6% from the peak of $247,000 in June 2022.
Sales volume has also decreased recently. In Oct 2022, there were 2,560 homes sold in the state of Iowa, a decrease of -14.8% from the previous month.
Comparing year-over-year, we saw a decrease of -16.7% sales from Oct 2021, when there were 3,075 home sales.
The number of sales peaked at 3,846 sales in Jun-2021; compared to Oct 2022’s numbers, we are down -33.4% in the number of homes sold from the height of sales activity of the last three years.
It is clear that the recent steep rise in mortgage rates has curved sales activity and shrunk affordability, and the result has been a drop in home prices in Iowa.
How Does The Iowa Housing Market Compare to the National Housing Market?
The Iowa housing market is similar to other markets because supply and demand drive the houses value. Mortgage rates also impact Iowa in a similar way as the rest of the nation.
Iowa’s home prices and sales numbers have begun to slow down along with the rest of the country. Differences in the regional economy of some of Iowa’s metro areas make those markets more vulnerable and others more resilient to the current economics.
The current median price of homes in Iowa is $218,400 compared to the national median sales price of $397,549. Over the past three years, the median price of homes in Iowa has increased by 17.1% compared to the national average of 35.7%
Iowa Metro Areas With The Hottest Housing Markets
The state of Iowa has seen slow growth in housing demand in recent years, consequently, prices have appreciated at a slow pace compared to the rest of the nation. There are some areas within the state that have outperformed others, though. We will look at the cities with the highest increase in the median price year over year.
The top markets with the highest appreciation rate:
- Mason City
- Cedar Falls
Davenport is the largest of the Quad Cities and is situated along the Mississippi River on the eastern boundary of Davenport. According to the 2020 census, this metropolitan area, with a population of 101,724, makes it Iowa's third-largest city.
This vibrant and progressive community boasts a thriving downtown and a business-friendly environment focusing on development and revitalization
Davenport’s home prices have been doing quite well over the last few years; in fact, Davenport topped the list of cities in Iowa with the largest increase in prices in 2022 with an increase of 30.8% from the prior year. For 2022, October’s median price was $170,000.
In October of 2022, there were 126 homes sold in Davenport, up -99.6% from the same period in 2021.
The median days on the market in October 2022 was 12, which indicates a seller’s market by today’s standards. Compared to October 2021, the median days on the market is down -99.6% compared to October 2022.
Clive city is situated in Dallas and Polk counties in Iowa state. This city is famous for its Greenbelt Park and trail system running through the community. Its population was 18,601 as of the 2020 Census. Also, the fact is that Clive is a part of the metro statistical area that includes Des Moines and West Des Moines.
The Clive Real Estate market is currently a somewhat competitive market. In Oct 2022, 26 homes were sold with a median price of $377,500. The median home price in Clive has increased 14.4% from Oct of 2021, while the number of homes sold was 26, a -33.3% decrease compared to the same month the year before.
The median days on the market in Oct 2022 was 11, and it’s down -50.0% compared to Oct 2021.
Mason is in the county seat of Cerro Gordo County, and the population was 27,338 in the 2020 census. This small town is located in the Midwest along the Winnebago River. The town has a warm-summer humid continental climate. From golf courses to historic sites and parks, you will enjoy plenty of outdoor recreation activities. It is also home to several historical sites and events.
Mason City is considered a somewhat competitive market right now. In October 2022, there were 31 homes sold with a median price of $377,500. The median price in Mason City was up 14.4% over October of 2021, while the number of homes sold was down -24.4% compared to the same period in 2021.
The median number of days on the market for October 2022 was 18 days which is up 50.0% from October 2021.
Cedar Falls is situated in Black Hawk County and is home to the University of Northern Iowa. The population was 40,713 as of the 2020 census. Cedar Falls shares a metropolitan region with its neighbor Waterloo. You can explore Cedar Falls' charming downtown, where a list of locally-owned shops and restaurants are hidden behind historic storefronts.
The real estate market in Cedar Falls is considered very competitive. There were 44 homes sold in October 2022, with a median price of $252,000.The median price in Cedar Falls increased 24.1% from October 2021, while the number of homes sold was down -21.4% compared to the same period last year.
The median number of days on the market for October 2022 was 9 days which is -85.5% compared to the same month in 2021,
Higher Mortgage Rates Could Slow Price Growth in Iowa
How will interest rates affect the Iowa housing market? We are already experiencing the impact of rising interest rates across the nation. Price growth in Iowa has been flattening or slightly declining for several months in 2022.
As of mid-October 2022, the 30-year fixed rate mortgage is above 7% on average. That represents a 133% increase in mortgage rates in less than nine months. The Feds are on a “no holds barred” approach to curve inflation, and interest rate hikes have become the norm over the last several Fed meetings. Unfortunately, it seems that rate hikes are not done. We anticipate at least another rate increase before the year ends.
Key Market Stats for the Iowa Housing Market:
As of the latest compiled housing report for Oct 2022.
|Current Value||Last Year||Change YOY|
|Median Sales Price||$218,400||$215,200||up by 1.5%|
|Number of sales||2,560||3,075||down by -16.7%|
|Median Days On The Market||20||100||down by -11.6%|
|Number of homes available||8,291||9,011||down by -8.0%|
|Months supply of inventory||2||2||no change|
|% of homes sold above list||29.2%||34.2%||down by -14.6%|
|% of home with price drops||31.6%||11.0%||up by 187.3%|
|New Listings||2698||2954||down by -8.7%|
Iowa Historic price changes & affordability
The Iowa housing market has slow to moderate home appreciation over the years. The last three years have been favorable to homeowners as they saw their homes appreciate by 17.1% in 36 months.
The steep rise in home prices and mortgage rates has shrunk affordability to record lows in the state. A 17.1% spike in home prices and a sharp increase in mortgage rates in the last 12 months does not spell good news for the Iowa Real Estate market.
We know that the average person’s wages do not increase by 17.1% in three years, so we can see why affordability is a problem. The gap between rising home prices and wages keeps getting wider.
- The housing market is clearly shifting, and Iowa housing market predictions for the short term seem to point to a declining market along with many areas of the US. Due to Iowa’s slow price growth, we are not going to see a significant drop in home prices in the near future.
- The next 18 to 24 months will be an adjustment, especially for home sellers and Real Estate professionals. Adjusting to a normalized market that is not heavily skewed in favor of sellers will take time.
- Real Estate markets are highly local and even within the same state, there will be areas that are projected to be hit hard by the market shift and others will fare better.
- Timing the market for buying or selling is a big gamble. If it makes sense for you to buy, go ahead and buy a home. For sellers, if you have to sell in the next 12-24 months, you may want to consider doing it sooner than later, especially if you are in an area that may be considered overvalued and has a high potential for house prices to drop.