|

Experts: Housing market has rebounded in Iowa City, nationally

BY RISHABH R. JAIN | SEPTEMBER 07, 2012 6:30 AM

SocialTwist Tell-a-Friend

The housing market is back — but not with a bang.

The U.S. housing market, which took a major hit in mid-2000s is moving strong on the road to recovery, with home sales jumping 25 percent in the last 12 months, according to a report released by the U.S. Department of Commerce late last month.

While home sales reached historical lows in 2008-09 nationwide, Iowa City real-estate agents said the local housing market merely experienced a “squeeze.”

“Iowa City housing market doesn’t have peaks and valleys,” local realt-estate agent Denise Hamlin said. “The national market goes up very high and very low, and we don’t have that here. The market is a lot more stable, and it is more like bumps in the road.”

Iowa City has experienced a 12 percent increase in home sales since the beginning of 2011, with 87 more homes sold this year compared with the same period last year. Single-family household sales increased by 13 percent, while condominium sales grew 8 percent.

Hamlin said 91 homes were sold in Iowa City in August, compared with 71 home sales in August 2011, with median household prices increasing around 6 percent.

University of Iowa economics Assistant Professor Nicolas Ziebarth said he believes the worst is over for the housing market, with such factors as record low interest rates, increased number in households for sale, and slight stabilization of the job market playing a key role.

“There is a lot of pent-up demand for housing in the form of households that weren’t formed during the recession,” he said. “You can only live in your parents’ basement sneaking your girlfriend in through a window for so long.”

Hamlin — who regularly updates her blog with the latest statistical data on the local real-estate market — said this increase was very significant.

The rate of home buying also seems to be increasing as homes spent less time being listed last month. The average number of days spent on the market decreased by three days from July to August —160 days to 157.

John Marshall, the president of Iowa City Area Association of Realtors, attributed much of the local increase in home sales to the buildup of confidence amongst homebuyers.

“Confidence is everything,” Marshall said. “The reality is, during this entire time, there was no fundamental reason for the Iowa City housing market to have gone down. People were beginning to get frightened about what the future might hold, and that is why our market slowed down.”

While there has been a significant increase in home sales, some local property-management firms said the market for rental property has remained steady.

Joe Hughes, the marketing and business development manager at SouthGate Development Services, said while the vacancy rate for the firm’s leasable properties remained at 2 percent, 50 more units were available for rent this year.

He noted that people who are going to reside in a property for more than five years are better off buying than renting in Iowa City. 

Homebuyers in Iowa City may be getting more excited about the market, but Ziebarth said housing may not be the best investment.

“I sincerely hope that the American love affair with housing is over with,” he wrote in an email. “If the Great Recession does that, I would hazard to say that the whole process was worth it. People got this crazy idea that a house was the only way to save. A house is a terrible way to save for investment for the vast majority of people who buy houses. People tend to become wildly under-diversified when they purchase a house, basically putting all of their net worth in that one asset. This is contra the most basic principle of investing, which is diversify, diversify, diversify.”


In today's issue:


comments powered by Disqus



 
Privacy Policy (8/15/07) | Terms of Use (4/28/08) | Content Submission Agreement (8/23/07) | Copyright Compliance Policy (8/25/07) | RSS Terms of Use

Copyright © The Daily Iowan, All Rights Reserved.