Editor’s note: Yesterday, Inman News reported on the Cape Coral-Fort Myers, Fla., metro area (see "Sunshine for Florida real estate?"), which led the nation with a 52.8 percent drop in the single-family median resale price in the second quarter compared to the same quarter last year. Today, Inman News reports on Davenport, Iowa, which led the nation with a 30.6 percent year-over-year increase.
Davenport, Iowa, may not jump to mind as a nation-leading real estate market.
And the area’s real estate professionals, too, seem a bit shocked and cautious about a nearly 31 percent jump in the area’s median resale home price from second-quarter 2008 to second-quarter 2009, reported by the National Association of Realtors trade group this week.
"This is not headlines. It’s just plain business as usual," said Lucky Lang, a top-producing Realtor for Mel Foster Co. Inc. in Davenport.
And while acknowledging that his own business has been thriving and the local economy has fared quite well compared to the nation as a whole, "We’ve been a fairly stable market. We didn’t have a bubble to burst. We’re just the ‘tortoise’ here. We keep plodding along."
Lang said his sales volume was up 40 percent last year, when he had a $10 million year, and he’s on pace for another $10 million year in 2009.
NAR’s reported 30.6 percent year-over-year rise in the median price of single-family resale homes in the Davenport-Moline-Rock Island, Iowa-Ill., metro area from second-quarter 2008 ($86,700) to second-quarter 2009 ($113,200) doesn’t seem to reflect the true market conditions, Lang said, and may owe to a different mix of properties on the market this year and a market correction last year.
Sue Clark-Nissen, CEO for the Quad City Area Realtor Association, which serves the Davenport metro area, said NAR appears to use different criteria for measuring the metro-area price changes than the local group uses.
"Our reports indicate a 5 percent increase in the median price when comparing second-quarter 2008 to second-quarter 2009," she said in an e-mail message, adding, "Over the past six or so years the value of home sales in the (association’s area) has shown an average increase of 3.5 percent. The number of properties sold is down, but the values are remaining consistent."
The association didn’t provide sales statistics for the region, though real estate Web site Trulia reported that home sales in Davenport have plunged about 28.1 percent in the past year, to a monthly rate of about 291 sales.
And the Illinois Association of Realtors reported that sales in Rock Island County, which is home to the Quad City communities of Rock Island, Moline and East Moline, Ill., dropped 28.7 percent from second-quarter 2007 to second-quarter 2009, with an 18.8 percent decline from second-quarter 2008 to second-quarter 2009.
Lang said that despite some buyer jitters over national economic news and some buyers choosing to "pull back the purse strings," "we’ve got 95 percent of people working, interest rates near historic lows and affordable pricing."
Previously owned homes in the Davenport area typically sell in fewer than 90 days, he said, and those priced under $150,000 sell even faster, while the supply of new homes priced in the neighborhood of $500,000 range around nine months.
"The market’s hot," he said.
The federal first-time homebuyer tax credit has lured some buyers off the fence, said several Davenport-area real estate professionals.
Lang said that of the 26 buyer clients he’s worked with who purchased homes this year, 10 were first-time buyers, six were out-of-towners moving into the area, six were buyers moving within the area, and four were investors who were purchasing homes to rent out.
"Inventories should continue to decrease in the $150,000-and-under (segment) through November (the end of the federal first-time homebuyer tax credit program)," he said, while he expects higher-priced new homes to "continue to slow." …CONTINUED
Kris Ratigan, director of marketing at Mel Foster Co. in Bettendorf, Iowa, part of the Quad City area, said a local homebuyer incentive program could also drum up more home sales.
On July 1, the city of Davenport launched "Davenport NOW," a property-tax rebate program that can be combined with the federal tax credit program as an incentive for new construction of homes and businesses and major renovations of existing homes.
Ratigan said that Davenport has seen "tremendous" growth in construction in the past five to eight years, and over half of the new homes built in the Quad City area have been built in Davenport.
Matt Wood, a Realtor for Mel Foster Co. Inc. who works in the Quad City community of Bettendorf, Iowa, said he has seen a lot of buyer interest in mid-range homes priced from $150,000-$270,000, and buyers of those properties tend to be in their 30s, "mostly (from) in the area, but some being transferred in with our larger companies in the area such as John Deere."
"We have very low inventory in that range at the moment in Bettendorf — it seems anything that is of any quality sells within 14-21 days," he said.
Homes priced from $280,000-$320,000 are selling more slowly, as they are unaffordable to many of the prospective buyers.
Wood predicts, "Overall, this market will remain one of the most stable throughout the country, and by the time spring 2010 hits, I think it will be right back to a seller’s market that we saw a few years ago."
As for distressed properties such as short sales and bank-owned foreclosure properties (REOs), Wood said those aren’t really a factor in his market area.
RealtyTrac reported Thursday that Iowa had the seventh-lowest rate of foreclosure in the nation, with one foreclosure filing for every 2,212 households in the state, on average.
The Davenport metro area was among 29 of 155 markets tracked by NAR that experienced a rise in the median price of single-family resale homes from second-quarter 2008 to the same quarter this year.
Other metro areas with leading year-over-year rises in median price, according to NAR: Cumberland, Md.-WVa., up 21.7 percent; Elmira, N.Y., up 11.3 percent; Beaumont-Port Arthur, Texas, up 11 percent; Jackson, Miss., up 8.2 percent; Buffalo-Niagara Falls, N.Y., up 6.7 percent; Bismarck, N.D., and Springfield, Ill., up 3.5 percent; Shreveport-Bossier City, La., up 3 percent; and Topeka, Kan., up 2.7 percent.
Statewide sales of resale single-family homes in Iowa were up 1.6 percent in second-quarter 2009 compared to the same quarter last year, according to NAR, and the Illinois Association of Realtors reported that sales were up 0.8 percent in July 2009 compared to July 2009. The statewide sales price, at $148,692 in July 2009, rose 0.1 percent compared to July 2008.
And the statewide average time on market has increased from 94 days in July 2008 to 103 days in July 2009.
Click here to view a report on the Cape Coral-Fort Myers, Fla., market area, which experienced a nation-leading 52.8 percent decline in resale median price in the second quarter compared to second-quarter 2008.
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