The average home sales price in Dubuque County and surrounding counties is more than $200,000 so far this year, a development that reflects a broader trend taking place throughout the country.
A report released by East Central Iowa Association of Realtors showed the average home sales price through August was $201,000, up from $189,100 during the same time period last year.
The rising prices have a significant impact on prospective buyers, according to association President Fred Droste.
“What we have seen lately is there have been price wars over good homes,” he said. “People are aware there aren’t a lot of homes out there. They know they have to pay what it takes if they want to get it.”
The uptick in average price coincided with a decline in sales.
Through August, there have been 909 home sales in the area in 2019. That marks a 10% decline compared to this point last year.
Droste believes the combination of fewer available homes and higher prices could be squeezing some first-time homebuyers out of the market.
“In some cases, they might have to settle for a lesser house than what they wanted,” he said. “In others, (this market) might keep some of them in rental properties for a longer period.”
RISING AND FALLING
In southwest Wisconsin, prices also have increased.
Deb Jenny, co-owner of Platteville Realty, said the average sales price this year in Grant County is about $152,000. At this point last year, the average sales price was just more than $148,000.
Similar to the Dubuque area, the number of sales has dropped. Jenny reported 255 home sales this year, down from 287 at this point in 2018.
“In our area, we’re really dependent on the farm economy,” she said. “This year, farmers have been hit by a really wet spring and with tariffs and low commodity prices. We’re a conservative area, so in times like this, people might hold off on moving.”
An unwillingness to move results in fewer homes on the market. That often results in buyers paying more for the properties that are for sale.
“It does force prices up a little bit,” said Jenny.
Anne Sadler, owner of Choice Realty in Galena, Ill., said similar patterns are emerging in Jo Daviess County.
So far this year, the number of sales has dropped while the average sales price has increased.
Many parts of the county are dealing with inventory issues similar to the rest of the tri-state area. The primary exception to that rule has been The Galena Territory.
“What we’re seeing there is we have more sellers than there are buyers,” Sadler said.
This is largely because The Galena Territory is a big “second home” market. While owners might be willing to get rid of those additional properties today, there are fewer people willing to take on another home.
Rising home prices aren’t unique to the tri-state region, and the trend doesn’t appear to be reversing any time soon.
A study released this week by real estate data firm CoreLogic forecasts a 5.4% nationwide increase in home prices over the course of the next year. The report attributes the increase to rising family incomes, low mortgage rates and an older contingent of millennials growing increasingly interested in buying.
Sadler agrees that there should be plenty of interest from homebuyers in the year ahead.
“Interest rates are still really low, and until we see higher rates, it is still a very good time to be financing homes,” she said.
She added that real estate still is considered a sound, safe investment. Many people today prefer to purchase property rather than putting their money into riskier vehicles, such as the stock market, she said.
For the foreseeable future, however, the number of homes on the market might not meet the demand from buyers.
“I don’t have a crystal ball,” said Jenny. “But we only have so much land and so many homes. There is a certain supply, and that forces prices up a little. You’ll have to pay more to get what you want.”