CEDAR RAPIDS — The prices of homes sold in the Cedar Rapids area continued to rise this past quarter. But real estate agents say homebuying activity is start to slow down after a rapid period earlier in the year.
Homes in Cedar Rapids, Marion, Hiawatha and Robins sold for an average of $192,179 and a median price of $167,000, according to data from the Cedar Rapids Area Association of Realtors. That represents an increase over last quarter by 7.2 percent and 11.3 percent respectively.
Since Jan. 1, the average home sale price increased by about 12 percent, while the median home sale price rose by 16 percent, a signal that homebuyers are favoring more expensive properties in the metro area.
Ollie Dent, an Realtor with Ruhl and Ruhl Real Estate in Cedar Rapids, said the numbers show what many real estate watchers expected this year — a ‘seller’s market’, with particular demand for more expensive houses.
Dent said the rise in median sale prices partially is due to property market values increasing, and that interest rates remain relatively low — despite the Federal Reserve raising the rate three times this year and signaling more hikes to come.
“They’ve created some affordability for someone who previously could have only afforded a $75,000 to $125,000 house,” Dent said.
“If they qualify for a loan, they’re going to qualify for a $150,000 to $250,000 house, and that gives them an opportunity for a little bit of a higher price point, and that’s what they’re gravitating to.”
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The data also shows the number of units for sale increased from 620 homes in June to 744 in September, a 24 percent increase.
Penny Novak, an agent with Skogman Realty, said that amount of inventory is far below what the area usually has available, which she puts between 1,200 to 1,400 during the summer months.
“What happened is the buying slowed down, so the inventory, as they still continue to come (on sale), they aren’t selling as fast,” she said, describing sales since August as “slow.”
She partially attributed that to homeowners who made purchases when interest rates were extremely low and want to keep that rate through the life of their mortgage.
“They’re kind of content to stay where they are because a lot of us won’t see that again ever, down in the twos and threes” percent interest, she said.
Novak also said inventory for more expensive houses is low, which prevents potential buyers looking for an upgrade over their current home aren’t able to do so quickly, minimizing more affordable options on the market.
Some trends in the Cedar Rapids market are mirrored nationwide. In a blog post, Cheryl Young, senior economist with homebuying site Trulia, wrote that the number of homes available in the third quarter was the most so far in 2018, and the overall shrinking of the market was the slowest last quarter in more than three years.
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