Facts & Trends Real Estate
Ruhl&Ruhl REALTORS
Fall 2013
Market Pauses Due to Uncertainty
Beth Brockette Realtor, CRS, ABR, GRI, ASP, GREEN 319.551.8692 BethBrockette@RuhlHomes.com BrocketteHomes.com
IN THIS ISSUE: page 4
Ruhl&Ruhl Announced as an Iowa Top Workplace
page 4
Home Prices Rising in our Local Markets
page 6
Iowa Farmland Value Increased 10.6%
page 7
Demand Heats Up New Construction Sales
page 7
The Smarter Way to Buy and Sell
Real estate sales were brisk through summer in most of our markets (see activity chart on page 2), but the market has stalled this fall due to uncertainty. 1) Interest Rate Fluctuations – Interest rates have been trending upward since August. Historically when a recovery starts to drive up rates, buyers increase their buying activity to beat the rise in rates. We saw that this summer. But higher rates and tight credit requirements are also taking some buyers out of the market, or causing them to buy at a lower price point than they could have before. Ruhl&Ruhl Realtors is encouraging buyers to seize the moment – our interest rates are still at historically low levels and buyers will be able to afford more house at today’s rates than at higher rates next year. Plus, prices are going up – so waiting will cause pain. 2) Buyer Confidence Eroded by Threats of Loan Default and Government Shutdown – All the negative “sky is falling” media is causing an erosion of buyer confidence. Despite the improving employment and economy, buyers are more cautious and moving more slowly. 3) Listing Shortages in “Affordable” Price Ranges – While “affordable” varies by market, we need more listings in the median to lower price ranges, typically under $150,000. There are also shortages in pockets of upper price ranges based on neighborhood, school district, and other niches that your Realtor can share with you. There is also a dearth of new construction spec home inventory. Builders still struggle to get financing on more than one spec at a time. This is holding back our new construction sales.
4) Months of Inventory – Months of inventory is lowest in the Iowa Quad Cities with 3.5 months; Burlington with 5.2 months; and DeWitt with 5.6 months. The lower the months of inventory the stronger the market is and the better for sellers.
Months of Inventory
Balanced Sellers Market Market
Buyers Market
0 1 2 3 4 5 6 7 8 9 10 Burlington
15
5.2
Cedar Rapids
6.7
Clinton
8.5
DeWitt
5.6
Dubuque
7.9
Galena
19
Illinois QCA Iowa QCA Iowa City
6.5 3.7 7.1
Maquoketa Muscatine SW Wisconsin Washington
20
8.3 6.1 10.1 11.3
5) The Good News – The good news is that prices are going up and interest rates are still at historically low levels: 4.33% for a 30-year fixed rate and 3.42% for a 15-year fixed rate, as of October 11. Buyers’ purchasing power is still much stronger today than at next year’s forecasted rate of 5.3%, allowing them to buy a more expensive home now than they will be able to afford next year for the same monthly payment. We expect prices to continue to increase as buyer confidence improves once the government gets back to work and does its job. At the end of 2013, sales results will be just a little ahead of 2012, which was a great year in our region. RuhlHomes.com • 1