K.M. Minemier & Associates is a certified Woman Owned Small Business (WOSB) engaged in full service real estate asset management and marketing.

HUD Articles

Housing Market Normalizing

March 15, 2023

The frenzied pace of home sales activity during the pandemic was not normal or sustainable, nor is it good for a healthy, stable housing market. A return to a slower market with more modest price  growth is a good place to be headed in 2023.

Across our region, home sales in 2022 were down 1% in sales volume and down 10% based on the number of properties sold. This was comparing 2022 to the best year ever in 2021, a year when sales were fueled by historically low interest rates and pandemic inspired desires for different housing.

Unit sales fell 10% in the 3rd quarter and 28% in the 4th quarter, due primarily to he 30 year fixed rate mortgage that doubled over the last year. We started at 3.2% back in January of 2022 and ended the year around 6.4%. We have never seen a year before when mortgage rates doubled. The rapid rise in rates, up to 7% at one point, slowed the market and scared prospective buyers and sellers. 

Thankfully, it’s a new year, and inflation seems to have begun to fall, as have mortgage rates. Rates are back in the range of 5.750% for a 30 year fixed conventional loan, and 5.375% for a 30 year fixed FHA or VA loan. This puts rates back in the historically normal range. But it will take some time for buyers to adjust, since rates were artificially low for the past few years. 

We are seeing big differences from market to market in our region.  The Burlington area is a buyer’s market, with 8.9 months of inventory, while the Quad Cities are still in a seller’s market, with less than 2 months of inventory. Clinton and Dubuque are still a seller’s market but with more inventory than the Quad Cities. Iowa City, DeWitt, SW Wisconsin, Galesburg and Cedar Rapids are in or approaching a balanced market which means there is enough demand from buyers to equal the supply from sellers. The variations depend on price ranges and neighborhoods, as well as local economies, etc. Buyers and sellers are encouraged to ask for a real estate review on their home or for the area they are interested in so they know what kind of market to expect.


Back To Article List



top