Housing Market Shows Signs Of Life
Tyler Kivell will make two life-changing commitments this year.
At the top of the agenda is the summer wedding he and his fiancée are planning. Before that though, he hopes to be signing the papers for a new house and moving out of his 800-square-foot apartment.
As for which has him more nervous, the 24-year-old is wisely tight-lipped. “No comment,” Kivell laughed Friday while touring a North Liberty property with his Realtor, Ted Burton Jacobsen.
The spring season, which ushers in the peak time of year for home sales, means many first-time home buyers like Kivell will be diving into a local market that has seen an uptick in sales during the first two months of 2012.
The Iowa City Area Association of Realtors, which represents about 400 agents in Johnson County, recorded the sales of 164 single-family homes in January and February, well ahead of the pace of the 114 single-family homes and 43 condominiums sold in the first two months of 2010.
“I think the whole country is looking toward recovery, and we appear to be one of those spots that is going to see the earlier sings of that recovery,” said Jacobsen, a broker for Re/Max Affiliates in Coralville and the host of a real estate show on local radio. “We’re very optimistic.”
The housing market peaked locally in 2007, then dipped in the years since, though not nearly as dramatically as regions harder hit by the recession. The low point in the Iowa City area came in 2010, when 17.5 percent fewer single-family homes were sold than three years earlier.
The Iowa City market rebounded slightly in 2011, with the Realtor association reporting a combined 2,291 single-family and condo sales in 2011 — up 1.1 percent from 2010.
Home prices also appear to be slowly climbing. The average sale price of a single-family home in in the Iowa City area in 2011 was $196,139; in 2010 it was $193,872. According to the Federal Housing Finance Agency’s fourth quarter 2011 statistics, Iowa City ranked 16th out of 306 national markets for home price appreciation and was one of only 30 markets to not see depreciation.
Iowa City remains one of the most expensive places to purchase a house in Iowa. In January, for instance, the Iowa City area had the highest average sales price in the state at $165,606, which includes both single-family and condo sales, according to the Iowa Association of Realtors. The state average for the month was $129,121.
Mark Kamps, president-elect of the Iowa City Area Association of Realtors, said rock-bottom interest rates have spurred the market. Thirty-year fixed rates have been in the 3.75 percent to 4 percent range in recent months.
Kamps said an unseasonably warm winter didn’t hurt things, either.
“Usually January and into February, when it’s cold and bitter here with a lot of snow, people aren’t out there looking at houses as much as I think they were this year,” he said. “I really do attribute that to both the weather and interest rates.”
University of Iowa associate professor of economics John Solow said a strong housing market bolsters other areas of the economy, from the construction companies that build the homes to the retailers that sell the appliances to the tradesmen who do residential work.
“If people are building houses in Iowa City, then the companies that are selling washing machines and refrigerators will tend to do well, too,” Solow said.
Jacobsen said that for buyers like Kivell, it’s a good time to be looking.
“We’ve got that continued perfect storm of low prices and low interest rates,” Jacobsen said. “The interest rates are pretty much at what we think is as low as they can go. This year there appears to be great signs of life. Many of us are seeing a lot of activity, suggesting that we’re at an activity level we haven’t seen for three or four years.”
Kivell, a University of Iowa graduate who works at an after-school program at Horn Elementary, has looked at about a half-dozen houses in North Liberty with his fiancée in recent months. The couple is looking for a ranch-style home with an open floor plan in the $250,000 to $275,000 range, and they’ve narrowed it down to a couple strong candidates.
Kivell said he’s ready take the plunge — both with marriage and home ownership.
“It’s time to have our money going somewhere,” he said.