Real Estate Investing Blog

Welcome!  |  Home   
Real Estate Investment Property

Your Premier Source for Turnkey Cash-Flow Investment Property

  "Live Where You Want.  Invest Where it Makes Sense!" ™

10 Reasons To Invest In The Iowa City Real Estate In 2019

An Overview of Iowa City Real Estate Market 2019

Iowa City is a several hour drive from slightly more famous Des Moines, Iowa. It is arguably in the heart of the Midwest, an area assumed by many to be in decline from the loss of agricultural jobs to automation and industrial jobs to outsourcing. However, Iowa City is a bright spot in this region. If you are looking at buying a house in Iowa City as a potential investment opportunity, you must read till the end. Home prices in the Iowa City real estate market are expected to rise by 1.7% in 2020. Iowa City is home to around eighty thousand people. However, the Iowa City housing market is much larger than this.

Include the suburbs, and this metropolitan area is home to around two hundred thousand people. In some regards, the Iowa City real estate market is even larger. For example, the nearby Cedar Rapids metro area is sometimes considered part of a larger regional metropolitan area. This gives the Iowa City-Cedar Rapids area a population of just under half a million people. However, the size of the market is not reason enough to invest in Iowa City rental properties. Let us discuss the Iowa City housing market trends and forecasts for 2019 and find out why should you consider investing here.

Iowa City Real Estate Market

Original Photo via Pixabay

Iowa City Real Estate Market Forecasts 2019 & 2020

The median home value in Iowa City is $222,700 on Zillow. Iowa City home values have gone up 4.7% over the past year and Zillow’s Iowa City real estate market prediction is that the prices will rise 1.7% in 2020. The median list price per square foot in Iowa City is $167, which is higher than the Iowa City Metro average of $160. The median price of homes currently listed in Iowa City is $259,900. The median rent price in Iowa City is $1,350, which is higher than the Iowa City Metro median of $1,235.

Iowa City Real Estate Market Forecast

Graph Credits: Zillow.com

According to LittleBigHomes.com, the Iowa City real estate market forecast for the 12 months ending with the 3rd Quarter of 2019 is positive. Their accuracy of the Iowa City real estate market trend prediction is 89%. Accordingly, they estimate that the probability for rising home prices in Iowa City is 89% during this period. If this Housing Market Forecast is correct, home prices will be higher in the 3rd Quarter of 2019 than they were in the 3rd Quarter of 2018.

Iowa City Oregon Housing Market Forecast 2019 – 2021

The Iowa City housing market forecast for the 3 years ending with the 3rd Quarter of 2021 is also positive. The accuracy of the Iowa City housing market trend prediction is 89%. Accordingly, LittleBigHomes.com estimates that the probability for rising home prices in Iowa City is 89% during this period. If this Housing Market Forecast is correct, home values will be higher in the 3rd Quarter of 2021 than they were in the 3rd Quarter of 2018.

Check this page each quarter for updates to the Iowa City Real Estate Market Forecast.

Iowa City Real Estate Market Trends

Iowa City real estate market trends indicate a decrease of $7,437 (-3%) in median home sales and a -2% drop in median rent per month over the past year. The average price per square foot for this same period fell to $165, down from $167. Trulia has 446 resale and new homes for sale in Iowa City, including open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process.

Iowa City Home Prices Trends

Credits: Trulia.com

The median sales price for homes in Iowa City for Feb 2 to May 1 was $225,000 based on 138 home sales. Average price per square foot for Iowa City was $165, a decrease of -1% compared to the same period last year. The median rent per month for apartments in Iowa City for Apr 7 to May 7 was $1,550.

Iowa City Real Estate Market Trends

Graph Credits: Trulia.com

Iowa City Housing Market Statistics

  • Median Sales Price: $225,000 (On Trulia)
  • Median Rent Per Month: $1,550
  • Price Per Sqft: $165
  • Median Household Income: $52,634
  • Home Owners: 64%
  • Single Residents: 47%
  • Median Age: 32
  • College Educated: 61%
  • Transportation: 80% people commute by car; public transport is available

There are 805 homes for sale in Iowa City, ranging from $50K to $4.8M on Realtor.com. 47 of which were newly listed within the last week. Additionally, there are 186 Iowa City rental properties, with a range of $385 to $3K per month. In February 2019 the housing market in Iowa City, IA was a buyer’s market, which means there were roughly more active homes for sale than there were buyers. Homes in Iowa City sell faster than average compared to other cities in Johnson County. It takes an average of 34 days on market for a home to sell in Iowa City.

Iowa City Housing Market Trends

Graph Credits: Realtor.com

In February 2019, the median list price of homes in Iowa City, IA was $269K, trending up 3.5% year-over-year. The median listing price per square foot was $134. The median sale price was $213.5K. On average, homes in Iowa City, IA sell after 34 days on the market. The trend for median days on market in Iowa City, IA is flat since last month, and flat since last year.

Iowa City Housing Market Trend

Graph Credits: Realtor.com

Iowa City Single Family And Multi-Family Homes

Following the housing market decline in 2007, single family rental properties became favorable options for investors, saving in construction or refurbishment prices. The quick turnaround for an owner to rent out their property means cash flow is almost immediate. Single family rental homes have grown up to 30% within the last three years. Almost all the housing demand in the US in recent years has been filled by single family rental units.

As per the data from the real estate company called Neigborhoodscout.com, the median house price in Iowa City is $252,593, which indicates that home prices in Iowa City are above the national average for all cities and towns. Single family detached homes are the single most common housing type in Iowa City, accounting for 42.48% of the city’s housing units. Other types of housing that are prevalent in Iowa City include large apartment complexes or high rise apartments ( 37.25%), row houses and other attached homes ( 9.75%), and a few duplexes, homes converted to apartments or other small apartment buildings ( 8.34%).

People in Iowa City primarily live in small (one, two or no bedroom) single-family detached homes. Iowa City has a mixture of owner-occupied and renter-occupied housing. Currently, there are 349 single family homes for sale in Iowa City, IA on Zillow. These include upcoming potential listings such as properties which are in the stage of Pre-Foreclosure. Additionally, there are 128 single family homes for rent in Iowa City, IA.

Iowa City, IA Foreclosures And Bank Owned Homes

The percent of delinquent mortgages in Iowa City is 0.4%, which is lower than the national value of 1.1%, according to Zillow.com. With U.S. home values having fallen by more than 20% nationally from their peak in 2007 until their trough in late 2011, many homeowners are now underwater on their mortgages, meaning they owe more than their home is worth. The percent of Iowa City homeowners underwater on their mortgage is 5.0%.

  • Foreclosures in Iowa City = 13 (RealtyTrac)
  • Homes for Sale in Iowa City = 334
  • Median List Price = $267,450 (9% ⇑ vs Jan 2019)

There are currently 13 properties in Iowa City, IA that are in some stage of foreclosure (default, auction or bank owned) while the number of homes listed for sale on RealtyTrac is 334. In March 2019, the number of properties that received a foreclosure filing in Iowa City, IA was 0% higher than the previous month and 0% higher than the same time last year.

Home sales for February 2019 were up 0% compared with the previous month, and up 0% compared with a year ago. The median sales price of a non-distressed home in Iowa City was $0. The median sales price of a foreclosure home in Iowa City was $0, or 0% higher than non-distressed home sales.

Iowa City Home Prices And Real Estate Appreciation

Iowa City real estate appreciation rates for homes in Iowa City have been tracking above average for the last ten year. The cumulative  real estate appreciation rate over the ten years has been 28.41%, which ranks in the top 30% nationwide. This equates to an annual average Iowa City house appreciation rate of 2.53%. Over the last year, Iowa City real estate appreciation rates have trailed the rest of the nation.

In the last twelve months, Iowa City’s appreciation rate has been 5.58%, which is lower than appreciation rates in most communities in America. In the latest quarter, real estate appreciation rates in Iowa City were at 2.71%, which equates to an annual appreciation rate of 11.27%. Importantly, this makes Iowa City one of the highest appreciating communities in the nation for the latest quarter, and may signal the city’s near-future real estate investment strength.

The above statistics on real estate appreciation in Iowa City were taken from NeighborhoodScout.com. You can visit their page for more information.  Relative to Iowa, their data shows that Iowa City’s latest annual appreciation rate is higher than 90% of the other cities and towns in Iowa.

10 Best Neighborhoods In Iowa City For Real Estate Investment

There are 37 schools in Iowa City, IA. There are 20 elementary schools, 6 middle schools, 6 high schools and 5 private & charter schools. There are 42 neighborhoods in Iowa City. Some of the best neighborhoods in or around Iowa City, Iowa are Eastside, University Heights and Peninsula Area.

Manville Heights has a median listing price of $510K, making it the most expensive neighborhood. Creekside is the most affordable neighborhood in Iowa City, with a median listing price of $154,900. Here are the 10 best neighborhoods in Iowa City to invest in real estate because they have the highest real estate appreciation rates (List by Neigborhoodscout.com).

Why Should You Invest in Iowa City Rental Properties?

Investing in real estate is touted as a great way to become wealthy. Is Iowa City rental property good for investment? Planning to invest in the Iowa City real estate market? Many real estate investors have asked themselves if buying a property in Iowa City is good investment? You need to drill deeper into local trends if you want to know what the market holds for the year ahead.

We have already discussed the Iowa City housing market 2019 forecast for answers on why to put resources into this sizzling market. The Iowa City home prices are expected to rise by 1.7% in 2020. Here are the top 10 reasons to invest in the Iowa City real estate in 2019.

1. The Large Student Market

Iowa City is home to the University of Iowa. It employs about two thousand people, and there are over thirty thousand students. This creates a large, constantly churning population that would pay a premium for Iowa City rental properties near campus. Another thousand students attend Cornell College in the suburb of Mount Vernon. Mount Mercy University and Iowa Wesleyan College are in commuting distance of Cedar Rapids.

2. The Stable Economy

Iowa City has a disproportionately large service sector. For example, it is home to the area’s only tertiary care medical center and cancer center. The region’s VA hospital is located here, though there are other hospitals in the city. It is the educational center of the area. In addition, its suburb Coralville has a large regional mall.

The area is a leader in wind power, and the agriculturally related employment remains strong. The Iowa City real estate market will remain stable compared to the declining surrounding towns because it allows many to move here and find decent paying work without moving across the country.

3. The Strong Short-Term Market

Iowa City ranked second in Airbnb rentals. Only Des Moines had more short-term guests. This is partially due to students using the service before committing to an apartment, and it is partially driven by the predictable influx of people who tour the campus before attending or come for events like graduation. Iowa City suburbs like Coralville have come to terms with it and regulate it instead of forbidding it.

This makes it a good source of revenue for Iowa City rental properties. Note that annual permits are required, and the city limits short-term rentals to a third of the properties in a neighborhood. Then there are the Amana Colonies, a historic site turned into a tourist attraction.

4. The Economics That Keep Many Renting

Median household income in Iowa City is around 43,000 dollars per year. The median home price is around $220,000, though the exact answer depends on what source you use. This makes home buying a challenge for many would-be buyers.

5. The Excellent ROI on Rentals

The average rent in Iowa City is just over a thousand dollars. Rental rates were up 10% year over year for one-bedroom apartments. Rent for single-family homes is increasing faster than the rate of inflation, because students are increasingly living in Iowa City rental properties intended to be single-family homes. Three students get more privacy, greater freedom and a lower overall bill than if they lived on campus.

Improving matters was an Iowa law that passed allowing more than three unrelated individuals in a rental unit. This will increase demand for Iowa City rental properties that are otherwise rented out to families, since students can double up in single-family bedrooms. This will also increase how much these properties can be rented out for. The median rent for Iowa City rental properties is 1350 per month.

6. The Steady Appreciation Rate

Iowa City is not a hot market. It is reportedly warm. Home values went up just under 5 percent in 2018. They are expected to rise 2 percent in 2019. This is certainly better than the contrarian trends across much of the Midwest, where hot markets are seeing double digit appreciation while rural areas see property values and rents decline due to virtual abandonment.

7. The Relative Landlord Friendliness

Iowa law says that tenants have three days to pay the rent. They have seven days to mediate a rental agreement violation. You can end a month-to-month lease with one month’s notice. You can give them a three or seven day unconditional notice to quit depending on their lease violations. When the tenant is a clear and present danger to others or the property, you can sue for eviction after three days’ notice.

8. The Modest Tax Rates

If you are an Iowa resident, the Iowa tax bill is one of the worst in the country. The state came in with the tenth highest overall tax bill. The income and excise taxes are somewhat worse than average. The state’s property tax bill is sixteenth highest in the country.

The average property tax bill is around 3 percent, while the national average is about 1.1 percent. However, this makes Iowa City’s relatively affordable real estate a relative bargain. And it is certainly better than Illinois rivaling New York and New Jersey for the highest property tax rate in the nation.

9. The Relative Lack of Supply

Investors in hot real estate markets have to wonder if the appreciation and rental increases will stop when a wave of new inventory hits the market. The Iowa City housing market does not face this problem.

Instead, demand for existing Iowa City real estate market remains steady while the supply is constrained by a lack of construction. Replacing homes that flooded or burned down does not bring new inventory to a slowly growing market.

10. The Opportunities for House Flippers

Iowa City sits on the banks of the Iowa River. It experiences both flash floods and seasonal flooding. Major flooding in the spring of 2019 has left many residents unable or unwilling to rebuild. That creates heavy demand for available Iowa City rental properties during the recovery phase.

It also opens the door to those who want to buy in the Iowa City real estate market at bargain prices, especially if you want to tear down the property and build something better. A side effect of the flooding is the demolition of many homes in the Iowa City real estate market. That will erode supply and increase demand.

Iowa City Real Estate Investment

Maybe you have done a bit of real estate investing in Iowa City, IA but want to take things further and make it into more than a hobby on the side. It’s only wise to think about how you can and should be investing your money. If you are a home buyer or real estate investor, Iowa City real estate investment definitely has a track record of generating one of the best long term returns in the U.S. through the last ten years. If you invest wisely in Iowa City real estate, you could secure your future. If you are a beginner in the business of cash flow real estate investing, it very important to read good books on real estate.

Most investors naturally gravitate to residential property investment. When looking for the best real estate investments, you should focus on markets with relatively high population and employment growth. Both of them translate into high demand for housing. If housing supply meets housing demand, real estate investors should not miss the opportunity since entry prices of homes remain affordable.

You must also collaborate and learn from savvy real estate investors who have retired early on in their lives by investing in some of the best real estate markets like Iowa City, IA. While the Iowa City real estate investment market is not overheated or exciting, it offers strong fundamentals like a large rental population relatively immune to rental rates. It will see slow, steady growth in property values and rental rates for years to come.

Buying an investment property is different from buying an owner-occupied home. Whether you are a beginner or a seasoned pro you probably realize the most important factor that will determine your success as a Real Estate Investor in Iowa City is your ability to find great real estate investments in that area.

According to real estate experts, buying in a market with increasing prices, low interest, and low availability requires a different approach than buying in a cooler market.

We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities U.S. growth markets. We can help you succeed by minimizing risk and maximizing profitability. Please contact us for a free strategy session by clicking here.

Other Best Places To Invest In Real Estate

Another market that we suggest is the housing market in Bend, OR. Bend, Oregon is arguably everything that Portland isn’t. It has lower taxes, more open space, more affordable real estate and attracts visitors from all over the country. It is a good place to consider investing if you’re willing to take up the challenge.

The median home in Bend, Oregon sells for around 425,000. The average list price is around half a million dollars. In Portland, the figures are similar but are pulled down by a larger number of one and two bedroom condominiums and two bedroom starter homes. The Bend OR real estate market is expected to see a 3 percent increase in property valuations in 2019. In contrast, Portland’s housing market has cooled. Prices may remain stable in Portland, or they may even decline one percent in 2019.

Another market that we suggest is the housing market in Tallahassee, FL. The Tallahassee area isn’t as glamorous as Orlando or Miami. Their high rental rates are offset by their sky-high property prices. Consider a more stable and reliable rental market like Tallahassee, Florida. If you owned a Tallahassee investment property, you would have seen the value rise 7.5 percent in 2018. Home prices are predicted to go up almost 4 percent in 2019.

Nor will the Tallahassee housing market see home prices pulled down by the deteriorating urban core. The average list price per square foot is actually higher in downtown Tallahassee than the broader Tallahassee metro area. The Tallahassee job market was middling a few years ago.

However, the city is poised for economic growth. It had the fastest growing economy per capita in the state last year. Employers are moving in, and it is becoming easier for people to find a job. As job growth continues, wages and rents will rise. Buy Tallahassee rental properties now while they’re cheap.

Let us know which real estate markets you consider best for real estate investing! If you need an expert investment advise, you may fill up the form given here. 

One of our investment specialists will get in touch with you to discuss all facets of searching for, buying, and owning a turnkey investment property.


*Remember, caveat emptor still applies when buying a property anywhere. The information contained in this article was pulled from third party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, the Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.

References:

Overview
https://en.wikipedia.org/wiki/Iowa_City,_Iowa#2010_census

Stable economy
https://en.wikipedia.org/wiki/Iowa_City,_Iowa#2010_census

Student market
https://en.wikipedia.org/wiki/University_of_Iowa
https://www.collegesimply.com/colleges/iowa/cornell-college

Strong Short term market
https://www.movoto.com/blog/opinions/move-to-iowa-city                                                              https://www.press-citizen.com/story/news/local/2017/12/27/airbnb-hosts-earn-more-than-1-5-million-johnson-county-2017/984832001
https://www.press-citizen.com/story/news/local/2016/09/13/coralville-oks-rule-regulating-short-rentals-like-airbnb/90310294

Renters priced out
https://livability.com/ia/iowa-city
https://www.neighborhoodscout.com/ia/iowa-city/real-estate

Strong ROI                                                                                                                            https://www.zillow.com/iowa-city-ia/home-values
https://www.rentjungle.com/average-rent-in-iowa-city-rent-trends
http://www.iowastatedaily.com/app_content/striking-a-balance-students-landlords-and-homeowners-diverge-on-next/article_f7211b7c-b6c3-11e7-b629-0b3393f9f916.html

Landlord friendly
https://realestate.usnews.com/real-estate/slideshows/does-your-state-have-fair-eviction-laws?slide=18

Taxes
https://wallethub.com/edu/t/states-with-highest-lowest-tax-burden/20494

Appreciation
https://www.zillow.com/iowa-city-ia/home-values

Lack of new supply
https://www.iowapublicradio.org/post/new-housing-crisis-shut-out-market#stream/0

Market Data, Trends and Statistics
https://www.trulia.com/real_estate/Iowa_City-Iowa
https://www.littlebighomes.com/real-estate-iowa-city.html
https://www.neighborhoodscout.com/ia/iowa-city/real-estate
https://www.realtytrac.com/statsandtrends/ia/johnson-county/iowa-city
https://www.realtor.com/realestateandhomes-search/Iowa-City_IA/overview

Flippers                                                                                                                    https://whotv.com/2019/04/22/flood-victims-shelter-in-camper-waiting-decision-on-rebuilding-in-flood https://www.desmoinesregister.com/story/news/2019/04/26/iowa-floods-rebuild-pacific-junction-hamburg-army-corps-of-engineers-fema-aid-glenwood-schools-water/3472142002


Add Your Comment: