Marion median home price rose 7% over last year

The median home price in Marion climbed by 7 percent over the past year — a “significant” increase, a consultant told Marion City Council Tuesday.

According to a housing needs study that was presented to City Council, the median price in the city was $255,000 through August.

The study pointed out that while market activity has been robust, it’s expected to decline due to rising prices, heightened interest rates and continued supply chain issues.

Home supply in the city remains tight and new construction has been hit with supply chain challenges and labor shortages, said Mary Bujold of Maxfield Research and Consulting, which conducted tracked prices from the end of 2021 to August 2022.

“The increase is significant,” she said. “We are seeing increases throughout the upper Midwest, but specifically in Marion, this percent increase exceeds that of other areas.”

Bujold added that there is a “critical” shortage of entry level, for-sale housing in the city as well.

“Marion has affordable rental options, but vacancies remain very low,” she said. “The median home-sale price is increasing, reducing options for entry-level buyers.”

The study comes as Marion has seen two decades of strong growth. Most recently, from 2010 to 2020, the city experienced a 19.5 percent increase in its population.

The current population of Marion is just more than 40,000.

Moreover, the study projected the city will to add another 18.9 percent, or 6,565 people, through the 2020s, and another 11.9 percent or 5,700 residents through the 2030s.

“So Marion needs more housing across the board, but also should focus on filling gaps in the housing stock through diversification of housing products,” Bujold said.

The advice comes as no surprise to city leaders. A similar housing report conducted in 2016 also showed a shortage of housing in the city and the lack of housing choices.

Over the past year, various large, multi-family projects have started construction around the city, from Broad and Main in Uptown Marion to the Green Park Apartments replacing the old YMCA, among others.

But there’s a need for even more, the study finds. Bujold recommended the city focus on creating single-family, detached homes on smaller lots, single-family attached homes such as townhouses, and more market rate, mixed-income and affordable rental units.

In July 2022, the vacancy rate for just the city’s overall 1,538 market-rate units was 1.3 percent, with the average rent being around $721 per month.

The consultant’s recommendations of units needed through 2030 included 500 entry level for-sale homes, 595 market rate rental units and 306 affordable rental units among other types of homes and rental units.

The study also pointed out that an estimated 72 percent of Marion renters with incomes of less than $35,000 per year are cost-burdened — meaning they spend more than 30 percent of their gross income on housing costs.

The median income in Marion is $76,969. Across the Cedar Rapids metro, that number is $66,686.

Forty-four percent of Marion owner households with incomes less than $50,000 are defined as cost burdened.

“We do see more young people electing not to purchase, although a lot of the national surveys indicate those people would purchase if they feel they could,” Bujold said.

“There is concern nationally that one of the most significant ways to gain household wealth is through owning.”

“We need to evaluate it versus our comprehensive and strategic plans and decide with council what we do with this data and how we provide more encouragement to fill gaps in the future,” City Community Development Director Tom Treharne said.

Comments: (319) 398-8255; gage.miskimen@thegazette.com