Cedar Rapids/Marion IA Real Estate Market Update_1st qtr 2024
Beth Brockette, of Brockette Homes with Ruhl&Ruhl REALTORS, is here to give you an update on the real estate market as we head into spring.
Since about 2018 or 2019, we started seeing a big change in the real estate market where we have more buyers than sellers. In other live videos, I’ve gone over some of the reasons:
- Since the recession of 2008-2010, builders are not building as many spec (pre-built) homes.
- Baby boomers are staying in their homes longer, due to interest rates, being healthier, etc.
- Homes are older and not getting replaced quickly enough to keep up with demand.
- New home construction is getting more costly with labor shortages and natural disasters increasing costs of materials.
While it may seem like homes are staying on the market longer, it’s just that we went through a period in 2018-2022 where sellers were getting multiple offers within the first day or week of listing at all price points.
Also, sellers started getting excited- maybe a little too excited- about an accelerating market, and some wanted to price homes too high. This does not help a seller. I’ll hear comments like, “Well, we can always come down.” That worked in a buyer’s market and maybe a balanced market, but it’s not a good strategy today. If you overprice and buyers start to see your home on the market for 30 days or more and then see price reductions, they wonder what’s wrong with your home.
Personally I did see things start to slow a little in 2023, especially around June through the end of the year, as interest rates started to rise to settle in at around 6%. Historically that’s still a very good interest rate. And 2% and 3% interest rates were really not sustainable.
As of the first of the year, buyers seem to be coming to terms with the fact that they aren’t going to just be able to “ride out” the higher interest rates. Predictions are that they will remain about the same throughout 2024.
Here’s the data for our area, Cedar Rapids/Marion, for the end of the 1st quarter 2024:
Up to a price point of $299,000, we still have only less than 3% inventory of available homes. This is very much still a strong seller’s market, especially for homes that are in good condition.
For homes valued at $300,000 to $699,000, we have about 5 months of inventory. That’s still considered a seller’s market, but much closer to a balanced market (6 months of inventory). If you’re a homeowner in this range, don’t be surprised if it takes a little longer to sell your home. Also you may not receive multiple offers– but you only need one good offer!!
It makes sense that this market is not quite as fast as the market of homes valued below $300,000. The average price of homes in the area is around $250,000. There are a lot more buyers qualified to buy below $300,000, and above that, you start to compete with new construction.
Our luxury market is around the $700,000 and up price range. These are typically homes that were custom built or nice homes on acreages. Homes valued between $700,000 and $799,000 have about 7 months of inventory, heading toward a buyer’s market, where there are more homes available than buyers who can afford them. There’s a little dip in the $800k-$899k range, which is interesting.. .just 2.5 months of inventory. And anything over $1 million is at 14 months.
It’s still challenging, whether you are a buyer or a seller. We are here to help you with our experience, to give you the facts and our best advice so you can make your best decisions.
There’s a lot of noise in the media about changes in the real estate industry. It comes down to everyone wanting transparency in real estate commissions and value of services. We have always operated in that mindset, and there is always space in any industry for value-added service. If you have questions about information you’re reading or hearing, I’d love to talk with you personally.
Whatever it is, everything real estate, I’m happy to chat with you! Hope to hear from you soon.