Overall Inventory Increases Set Stage for Active Spring Housing Market in Iowa

The Iowa housing market mirrored that of the state’s temperatures in February marked by drops in inventory and sales. These seasonable movements, however, pave the way for signs of a typically active spring market just around the corner. 

“Mortgage rates have now fallen for the past seven weeks in a row, which is welcome news for buyers waiting to see what spring interest rates would bring after seeing small hikes through the end of the fourth quarter of 2024. Couple that with three months straight of stable inventory and we’re hoping it’s setting the stage for a solid end of the first quarter,” Travis Bushaw, Iowa REALTORS® president, said. “That said, despite the fact that there’s significantly more available homes compared to last February, we still saw fewer sales in the last month than we did compared to January of this year and even February of last year.” 

Single-Family Home Market
The statewide housing market experienced seasonable drops in February, with 1,740 closed sales, a decrease of 4.2% from the 1,820 homes sold in February 2024.  

New listings also contracted, dropping 10.7% in February with 2,778 homes listed compared to the 3,112 homes listed one year ago. Overall active inventory, on the other hand, provided a bright spot in February, jumping 27.2% to 7,390 homes compared to the 5,810 homes listed overall in February 2024. 

Across the state, new listings illustrated the variety of options for buyers. The leaders in new listings are not surprisingly being seen in the larger urban areas, with the Quad Cities areas bringing in 350 new listings, Cedar Falls and Waterloo saw 250 new listings last month, and Cedar Rapids followed with 202 new listings. Des Moines out paced all other areas of the state with 861 new listings in February. 

The median sales price remained steady at $225,000, a 4.7% increase from last year. Median days on the market increased 69.2% to 22 days, while the median sold price per square foot increased 5% to $149 compared to one year ago.

Townhomes and Condos
The townhome and condo segment saw continued increases in February, with the exception of new listings. The number of new townhomes and condos entering the market dropped 11.1% from 512 in February 2024 to 455 last month. 

Closed sales on the other hand saw marked improvement, jumping 23.7% to 245 properties sold from the 198 sold one year ago. 

The median sales price for townhomes and condos increases 1.2% to $225,000. Properties spend an average of 25 days on the market in February up 212.5% from 8 days on the market in 2024. 

Market Outlook
“Over the last few weeks, we’re seen home prices inch up, an expected occurrence as we move closer to the spring market,” said Les Sulgrove, Iowa REALTORS® statewide housing analyst. “We anticipate seeing prices continue to increase over the next few months. However, the price jumps will be much more subtle than last year, which is a good sign for homebuyers. It gives them confidence that homes won’t be priced out of their ability to purchase and it draws new homebuyers into the market.”