Iowa, the Hawkeye State, became a state in 1846, the 29th to be added to the United States. Between the Mississippi River to the east and the Missouri River to the west, the state covers 56,272 square miles, making it the 26th largest state. At the heart of the Corn Belt, the population of 3,123,899 makes it the 30th largest state by population. Find out below if the Iowa real estate market is the right one for you to invest in.
Iowa’s population is expected to grow approximately 5 percent over the next ten years. The unemployment rate is 8.84 percent but the projected future job growth is 1.1 percent annually through 2020. Often thought of only as an agricultural state, the economy has become diversified and only a small portion is still in farming and agriculture. The top three employers, in order, are the City of Iowa City, Genesis Medical Center, and Principal Financial Group Incorporated.
The 2016 Housing Market in Iowa is stable with a Zillow rating of 4.8 out of 10. In the current real estate market, the median list price for a home is $129,000, the median closing price is $157,000, and the average sale price is $165,609. Housing market predictions expect to see a market growth of 4.4 percent and also an increase in property values of 4.2 percent over the next year.
Influencing Factors for the 2016 Iowa Real Estate Market
- The median home value of a house in the Iowa market, according to the Zillow Home Value index is $124,700. This is a 2.4 percent increase over 2015, and the increase is predicted to continue at approximately 3.4 percent through 2017.
- The current foreclosure rate is 0.08 percent. As of August 2016, this rate is 13 percent higher than July 2016 and 22 percent higher than the same time in 2015.
- Iowa’s median rental price is $1081 per month. This price is 2 percent lower than the preceding year, 2015.
- The APR for a mortgage in the Iowa market commonly falls within the range of 3.26 percent to 3.36 percent, currently 3.34 percent. The average rate is 3.33 percent which is on target with the national average of 3.31 percent.
Best Places to Live in Iowa
The capital of Iowa is Des Moines; 203,433 people live there making it the most populous city in the state. Des Moines is one of the major centers of the U.S. insurance industry including such companies at Principal, Fidelity, Allied, and Wellmark. It is also home to large financial services including Wells Fargo and Voya. The Meredith Corporation, which publishes Better Homes and Gardens, is located in Des Moines.
The Des Moines real estate market is rated 4.5 out of 10 by Zillow which is stable. Zillow Des Moines lists the current home value at $117,900, 4 percent higher than last year and expected to continue increasing at a rate of 3.5 percent. The median price for both listings and closings is $125,000 while the average sale price is $184,961. As of August 2016, there were 876 homes in some stage of foreclosure. This is 53 percent higher than July 2016 and 24 percent higher than 2015. Seventy-four percent of residents own their homes, 38 percent are single, and the median age is 36 years. According to Trulia Des Moines, a two to four bedroom home can sell for as low as $35,000 whereas a four to six bedroom home can sell for anywhere from $2 million to $3.5 million. While Realtor.com lists 1476 homes for sale, an additional 111 homes are available to rent. The median rent is $1085 and the rent index is $1152, which has stayed shown no change since last year. Craigslist Des Moines lists one bedroom apartments as low as $350 per month and four and five bedroom rental houses around the $3000 price range.
The 2nd largest city in Iowa is Cedar Rapids with a population of 126,326. Forty percent of residents are single and the median age is 38 years. Various companies either have their headquarters or a large presence in Cedar Rapids. Rockwell Collins and CRST are both based there as well as the U.S. headquarters of AEGON. Other companies with a major presence are Quaker Oats, Cargill, and General Mills, among others. The Cedar Rapids real estate market states the median list price is $167,000 while the median closing price is $135,000. The number of homes in some stage of foreclosure as of August 2016 is 365, while much lower than last month (down 39 percent) it is slightly higher than the same time last year (up 9 percent). The market saw a 5 percent increase over last year. Three quarters (76 percent) of residents own their homes. On average, a two or three bedroom home can sell for around $25,000 while a four to six bedroom home can surpass the $1 million mark. In addition to the 941 homes for sale, there are 461 homes for rent. The rent index is $1095, up 3 percent, and the median rent is $1000. A one bedroom apartment rents from $550 while a five to eight bedroom house rents for over $3000.
Davenport is the 3rd largest city in Iowa. The population of 104,589, 40 percent who are single and at a median age of 34 years. The city’s largest industry is manufacturing; this includes the John Deere plant. The Davenport real estate market list 704 properties for sale. The median list price is $110,000 and the median closing price is $129,000. Homes values have increase 5 percent from 2015 to 2016. Seventy percent of the population own their homes. A two to four bedroom house can sell for $20,000 while a larger home with three to seven bedrooms might sell for $525,000 to $560,000. In August 2016 498 homes were in some state of foreclosure, 38 percent higher than the previous month and 41 percent higher than the previous year. Realtor.com listed 95 homes for rent. A one bedroom starts for $425 per month and anywhere between two to four bedrooms rents for $2000 to $2400 per month. The median rent is $1000 and the rent index is $1144, 2 percent higher than the previous year (2015).
Iowa City, population 74,220, is the 5th most populous city in Iowa. The single population is 47 percent, the median age is 32 years, and 64 percent of residents own their home. Iowa City is home to the University of Iowa of which the University of Iowa Hospitals and Clinics is the largest employer with almost 25,000 employees. The Iowa City real estate market is expected to see little change going forward, much like the minimal amount of change in recent history. The median list price is $228,000 and the median closing price is $199,000. There are currently 533 properties for sale and another 96 properties in some stage of foreclosure. Two or three bedroom homes start around $80,000 while a four to six bedroom house can vary from just under $900,000 to just over $1 million. Realtor.com lists 47 homes for rent. The median rental price is $1350; the Zillow rent index is $1478, 3 percent higher than in 2015. A one bedroom apartment rents for around $475 and two to four bedroom rental properties can be over $2000 per month.
Ames, Iowa is 30 minutes north of Des Moines and home of Iowa State University, also the largest employer in the city. Ames is also home to the U.S. Department of Agriculture National Animal Disease Center, the U.S. Department of Energy’s Ames Lab, and the Iowa Department of Transportation. Of the 60,635 residents: 59 percent are homeowners, 44 percent are single, and the median age is 31years. The current value of a home on the Ames real estate market is $252,375, an 11 percent increase over 2015. The median list price is $284,000 and the median closing price is $200,000. A small three bedroom house sells beginning at $55,000 to $65,000 and a four or five bedroom home can sell for $1.1 million. Only 26 properties are listed in some stage of foreclosure. In addition to the 216 properties listed for sale, another 38 are listed for rent. The rent index is $1229, 10 percent lower than last year, and the median rental price is $1300 per month. A one or two bedroom apartment can rent anywhere from $400 to $700 per month and a six bedroom house can rent for about $2400 per month.