With all the national media attention on the real estate market and what it’s doing in metropolitan areas across the United States, I find it interesting how those that report on the conditions do a bit more generalizing than what I would consider to be appropriate in speaking about what is happening in smaller cities and towns across the Midwest.
In watching what the market has been doing here in North Iowa, I’m finding some interesting patterns being formed. There is a clear sign that far too many of the young first-time buyers are opting-out of purchasing a home that is in need of repairs and often times simply a cosmetic update. There is a very well built home that I’ve had listed for far too long that lacks a newer furnace and doesn’t have central air but is still functional. Everything else in the home is livable for nearly any entry level buyer who would in time change out the furnace along with installation of central air, updated the kitchen and bath countertops, and change the vinyl in the kitchen. Believe it or not, that home sold at a deep discount to a middle-aged couple who’s owned a home before. Because the price had been reduced to the point of being at investor grade, the buyer asked if I knew of anything that was wrong with the home that wasn’t visible. That’s what is happening in the that area of our market. On the flip side, I am seeing upper level homes that have all the updates as well as being in what buyers believe to be more sought after locations and floor plans selling for close to the asking price if not at asking price. Some have even gone over asking simply due to likely multiple offers. What’s the reason? My take on it is that there lives a fear factor in buyers who through their own investigations via TV programs and internet, consider homes that are not turn-key to be land mines of hassles in dealing with contractors, lumberyards, and cost over-runs. I consider myself very fortunate in not having many unexpected surprises when having updates done simply because I try to keep the mindset of measuring twice and sawing once. Careful planning is the key to getting things accomplished in a timely manner along with minimal cost overages.
In every study there is always the center to consider. Our market center seems at times to show no rhyme or reason why one given home sells for considerably more than one that is similar in size, age, condition and location. Then there are those that sold for far less than what I would have considered fair market price. Of late, whenever someone asks me about the center price range of our market, I simply say “The direction has yet to be determined.” One home sells higher for no apparent reason while another sells lower. I wouldn’t want to be an appraiser in these times simply due to the all-over-the-map sale prices they have to deal with in creating an appraisal report. Compared to the nation, I would say we have in North Iowa some interesting real estate market vectors.
