Housing markets on the rise in Iowa City, the state, and nationally

BY QUENTIN MISIAG | MAY 16, 2013 5:00 AM

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Despite a flurry of construction projects around the Iowa City area, the demand for real estate is still on the rise.

The latest reports from the Iowa City Area Association of Realtors indicate that home sales and prices rose last month compared with last year.

The average sale price of a home in the Iowa City area was $201,080 in April, a jump from $198,086 the same time a year ago. From January to April, 542 residential units were sold in the area, with Iowa City accounting for 175. In April 2012, 526 housing units were sold.

Locally, real-estate experts say a number of factors are contributing to current trends, including available land, low interest rates, and economic protection from the University of Iowa, Oral-B, and Proctor & Gamble.

“Our prices always remain very stable in regards to other parts of the country, but we are seeing this year some moderate price increases, which is good for sellers,” said David Biancuzzo, incoming president of the Iowa City Area Association of Realtors.

He said that although he has seen luxury home sales return, continued growth in the University of Iowa Oakdale Research Park and in North Liberty has helped fuel the highest demand for properties under the $200,000 range.

These recent growth patterns aren’t exclusive to Iowa City.

The Iowa Association of Realtors’ April 2013 Housing Trends Report shows a 6.1 percent climb throughout the state from the same month a year ago.

In all, the state saw 2,851 sold or closed homes this April, a rise from 2,688 homes a year ago.

Median sale prices rose by 3.2 percent or $4,000 to $128,000 from April 2012.

The average number of days homes sat on the market in April 2012 was 111 days, while the average this April was 99 days.

Don Marple, the president of the Iowa Association of Realtors, said nearly all of Iowa’s 44 real-estate markets have seen increased buyer interest, driven by low interest rates. He highlighted the Iowa City, Des Moines, and Quad Cities markets as shining growth examples.

“What our issue is is the lack of inventory, which is creating a seller’s market,” he said. “There are more homes coming on the market, but I don’t think inventory will increase enough to keep up with demand.”

Statewide, inventory is down 13 percent from April 2012, when a total number of homes stood at 21,061.

For Iowa City real-estate agents and brokers, the stability in the market is evident in home prices and lack of available land.

Adam Pretorius, a realtor at Blank & McCune, said he has seen “accelerated growth” in the 10-year-old Peninsula Neighborhood development, just off Dubuque Street and Foster Road.

“The demand is struggling to meet with supply,” he sad. “Everything has just been selling so quickly, and the builder hasn’t been able to build fast enough.”

Although growth remained stagnant after construction began in 2003, Pretorius said the last four to five years have seen strong sales, with more than 100 units sold in the past two years between the $124,000 and $600,000 price point.

To date, 64 condominium units are under construction, with 49 more slated to be built by year’s end.

George Etre, the owner of Takanami and Formosa in downtown Iowa City, said as other areas of town have been built out, a new market for urban living has arisen.

“People ask me all the time, ‘How I can get in there,’ ” he said about being a resident in Plaza Towers. “I think people have always wanted to live downtown, but they didn’t have any options. You never want to tailor it towards one option.”

Ross Nusser, a broker with Lepic-Kroeger Realtors, said as prices increase, the area has recently transitioned into a sellers’ market.

Nusser said a shortage of land has risen as area farmers hold on to their land for longer periods. He said such developments as Arlington Ridge and Cedar Springs have eliminated once-abundant land. His team’s nearly 75 pending sales have already outpaced all of sales in 2012.

“This year’s been different than any other year I’ve been in real estate,” he said. “Every price point is strong right now. It’s still in that transition, and there are still deals to be had by buyers, but sellers are starting to have more power and influence.”

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