Builders See Little Doom and Gloom in Cedar Rapids, Iowa
The housing market in Cedar Rapids, Iowa showed the highest price appreciation in the country last year, First American CoreLogic reported last month.
While the attention of the news media to the statistics from the data collection company was drawn primarily to areas of the country showing the most substantial declines in housing prices, Cedar Rapids posted a 12-month increase in home values of 8.83%.
The findings were based on First American CoreLogic’s LoanPerformance HPI, which incorporates more than 30 years worth of repeat sales transactions, representing more than 45 million observations. Tracking increases and decreases in sales prices for the same homes over time provides a more accurate “constant-quality” view of pricing trends than basing analysis on all home sales, the company says.
The good news was not confined to Cedar Rapids. The 10 Core Based Statistical Areas with the strongest home price gains all experienced appreciation of greater than 6%. And the state of Iowa also scored in the plus column, although just barely, with a gain for the year of 0.28%.
“Permits pulled have been stable for the last three years after a significant drop in 2005,” said Drew E. Retz, president of the Greater Cedar Rapids Area Home Builders Association and vice president of Jerry’s Homes, Inc., Iowa’s largest active builder. “As a result, our market is seeing that supply and demand are fairly well balanced. We never saw the price escalations in land or in home sales prices that they saw on either coast, and as a result, we have not seen the bubble burst.”
Iowans are fairly conservative, Retz noted. “Builders live and work closely with their neighbors and are here for the long haul. As a result, we are always trying to ensure that we provide the best value and quality for our clients, neighbors and friends. We just haven’t had the experiences you hear about in many other markets with inflated prices, and as a result we have experienced almost normal appreciation.”
That doesn’t mean that everything is rosy for everyone in Cedar Rapids, he said. Some builders have experienced some of the competitive difficulties that are inherent in the home building industry, he said. However, “I just spoke with a builder earlier this week that had their best year ever in 2008. This is the greatest industry in the world to be in. The limitations are only our imagination and guts. There is always room for another builder willing to provide a better product and services for the buyer.”
With economic conditions darkening considerably across the country in recent months, Margaret “Midge” Barvinek, executive officer of the association, said that she is hoping to see the area remain relatively stable this year. “With our association working with the City of Cedar Rapids, the Chamber of Commerce, Priority One and other entities that can help shape the local economy, I think we will be in a positive mode for future growth.”
In constant contact with her members, Barvinek reported that, “Some say they can feel a small slowdown, some say they are holding steady and a few say they can feel the economic crunch hit their business. Most seem to be in the ‘holding steady’ category for now. We are not in the same economic situation as some parts of the East and West coasts and some spots in the South.”
Remodeler Wayne W. Winn, of Home Town Restyling in Hiawatha, Iowa, said that the local market for home improvements remains favorable.
“In the past two months our sales have increased more than 30% over the same time period as last year,” he said. “We are very fortunate to do business in a market with good credit and where home values have appreciated.”
According to First American CoreLogic, besides Iowa, states that saw home values increase in 2008 included: Texas, up 1.83%; Vermont, 1.86%; South Dakota, 2.14%; New York, 3.05%; North Dakota, 4.04%; and West Virginia, 5.69%.
Tax Credit Web Site Looks at Opportunity of a Lifetime
Builders and other industry professionals can help spur home sales by referring prospective first-time home buyers to www.federalhousingtaxcredit.com. The NAHB Web site provides detailed information on the $8,000 federal tax credit for first-time home buyers included in the economic stimulus legislation signed into law by President Obama.
Consumers can use the Web site to find information on the tax credit – including a detailed question and answer section. It also includes information about other housing-related and small business measures in the legislation and a number of home-buying resources for consumers.
“The new tax credit provides a great opportunity for first-time home buyers,” said NAHB Chairman Joe Robson. “Combined with today’s near record low interest rates, the large selection of homes on the market and very competitive pricing, the tax credit should provide the extra incentive needed to get prospective buyers who have been sitting on the fence into the market.”
Industry professionals are encouraged to highlight the tax credit Web site when marketing to their potential first-time home buyer market.
Plan to Attend Construction Forecast Conference and Webcast
Plan to attend or watch the 2009 Spring NAHB Construction Forecast Conference & Webcast on Thursday, April 23 in Washington, D.C. to get the latest facts, insights and analysis of the housing industry.
Panels of nationally recognized experts at the day-long conference will discuss economic trends, government policies, developments in the housing industry and the results from NAHB's recent surveys.
For more information and to register, visit www.nahb.org/cfc.
Want to Know the Housing Starts Through 2017?
Find out in HousingEconomics.com's Long-Term Forecast.
Subscribe and get downloadable Excel tables that feature the housing starts forecast, gross domestic product (GDP), demographics and more.
To learn more, visit www.housingeconomics.com.
Free NAHB Kit Gives Builders Back-to-Basics Tips to Navigate the Slowdown
What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn.
To help members navigate the uncharted waters of this slowdown, NAHB has compiled a comprehensive “Back to Basics” online toolkit — the best of the basics, the tried and true and the truly new. To access the toolkit, click here.
To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar.
For assistance, call the NAHB Member Service Center at 800-368-5242.