Eastern Iowa housing market divided

With rates for 30-year, conventional fixed-rate mortgages averaging about 3.5 percent with zero points, you would think the Eastern Iowa housing market would be strong at all price ranges.

But an analysis of multiple listing service data for the Corridor, the Quad Cities and Dubuque in September shows there's a divide between affordable homes selling for $350,000 or less and those priced above that level.

In the Cedar Rapids area, there is 4.5 months of inventory for homes priced $350,000 or less and 8.8 months of inventory for houses priced above $350,000. Just over five months of inventory exists for homes priced below $350,000 in Iowa City/Coralville and 9.8 months of inventory is available for houses selling for more than $350,000.

Fewer than four months of inventory is considered a sellers's market in the real estate industry, four to six months is balanced and greater than six months is viewed as a buyer's market.

The months of supply indicates how long the current inventory of homes for sale would last given the existing sales rate if no additional houses were listed.

'There's a very reduced amount of inventory this year, but affordable homes are available,” said Ollie Dent, agent in the Cedar Rapids office of Ruhl & Ruhl Realtors and incoming president of the Cedar Rapids Area Association of Realtors. 'Homes in Cedar Rapids and the Corridor remain quite attractive in terms of price when compared with other markets in the country.”

Caroline Ruhl, president of Ruhl & Ruhl Realtors, said less expensive homes are appreciating in value due to strong demand and low inventory available for sale. More expensive houses are appreciating less or not at all because of excess inventory and low buyer demand.

In a news release last week, Lawrence Yun, chief economist for the National Association of Realtors, said healthy labor markets in most of the country should be creating a sustained demand for home sales.

'However, there's no question that after peaking in June, sales in a majority of the country have inched backward because inventory is not picking up to tame price growth and replace what is being sold quickly,” Yun said.