Facts & Trends Real Estate
Ruhl&Ruhl Realtors
Winter 2016
Local Real Estate is a Safe Investment
Barbara Scott Realtor
Burlington Office 403 S. Gear Avenue, Suite 105 West Burlington, IA 52655 (319) 759-3918 BarbaraScott@RuhlHomes.com BarbaraScott.RuhlHomes.com
IN THIS ISSUE: page 4 Ruhl&Ruhl Realtors Celebrates a Great 2015
page 4 Homes Prices Keep Appreciating
page 6 RuhlHomes.com - A New Site for the New Year!
page 7 Slight Dip in 2015 New Construction Sales & Inventory
Given the volatility of the stock market so far in 2016, investors would be smart to put their money in local real estate. Interest rates are still very attractive, inventories are good and the rental market is very strong. Our home prices are still affordable, and real estate continues to appreciate slowly but steadily in our markets (see page 4). REO’s (foreclosure properties) are especially good values and can be seen at RuhlHomes.com/Foreclosures. One of the investment strategies we encourage our clients to consider is to buy a home for each of their children or grandchildren as a gift when they are born. We suggest renting it out and FRQVLGHU Âż[LQJ LW XS ZLWK WKH FKLOGÂśV LQYROYHPHQW IRU WKH QH[W \HDUV :KHQ they are ready for college, they have a built-in college fund – either from the rental stream, home sale proceeds or UHÂżQDQFLQJ SURFHHGV RQ WKH KRPH 3OXV when they graduate and relocate back KRPH Âą WKH\ DOUHDG\ RZQ WKHLU ÂżUVW KRPH The main objection we hear from people interested in investing in real estate is: “I don’t want to deal with tenants, home maintenance and repairs.â€? Ruhl&Ruhl Realtors’ Property Management Department is happy to help, or your agent can suggest other management options.
Forecast for 2016
2015 was a great year! Nationally, the total volume of residential sales was the highest since 2006. 2016 will continue the upward trend, though not as strongly as it was in 2015. According to Lawrence Yun, Chief Economist for the National Association of 5($/7256Š ³H[LVWLQJ KRPH VDOHV DUH IRUHFDVWHG WR H[SDQG LQ DW D PRUH moderate pace as pent-up buyer demand combats affordability pressures and
meager economic growth.â€? “This year the housing market may only squeak out 1% to 3% growth in sales EHFDXVH RI VORZHU HFRQRPLF H[SDQVLRQ and rising mortgage rates.â€? &OHDU &DSLWDO +RPH 'DWD ,QGH[ SURMHFWV home price appreciation in the range of 1-3% by January 2017. As shown on page 4, in the past year, homes in our regional MSA’s appreciated: % Change in Metropolitan Statistical Areas Prices 1 Year Cedar Rapids, IA +1.45% Quad Cities, IA-IL +2.42% Dubuque, IA +1.33% Iowa City, IA +3.52% According to Clear Capital, homes in the low tier (selling below $116,000 nationwide) are forecasted to appreciate more than the KLJKHU WLHUV GXULQJ %\ GHÂżQLWLRQ WKH low tier is affordable to the widest range of potential homeowners and investors. This larger class of buyers will likely cause continued higher appreciation for the most affordable home tier. The Midwest is projected to be the fastest growing region in the country, with 2.5% annual appreciation in 2016. As always, this will vary by price range and neighborhood.
Ruhl&Ruhl Regional Forecast
Inventory levels are good and balanced between a buyer’s market and seller’s market (4-6 months of inventory) in most of our markets. The Iowa Quad Cities and Muscatine areas have the lowest months of inventory (see Activity Chart on page 2). Inventory is tight in some markets, mostly at entry level price points, but growing in our upper price brackets. :H H[SHFW WKH QXPEHU RI SURSHUWLHV VROG in 2016 to be up slightly and appreciation to continue in the 1% - 2.5% per year range, resulting in sales volume going up about 3.5%.