Cedar Rapids, IA Real Estate Market Trends & Analysis [Updated 2021]

by Than Merrill | @ThanMerrill
Published on Tue, May 25 2021

Jump To Another Year In The Cedar Rapids Real Estate Market:


The Cedar Rapids real estate market has done everything in its power to put the latest recession in the rearview mirror. For the better part of a decade, in fact, real estate in Cedar Rapids has been able to improve its outlook, and that’s including the latest setback created by the pandemic. While it still has a ways to go, encouraging improvements have been put in motion to lay a strong foundation for the future of the Cedar Rapids real estate market.

Like everywhere else, values have risen in the wake of three very specific indicators: positive sentiment in the real estate industry, a strengthening economy, and a distinct lack of available housing. While not unique to Cedar Rapids, these three indicators have combined to lift the local housing market. As a result, the city has seen demand grow in the face of recent appreciation, which bodes well for everyone, especially investors.

Cedar Rapids Real Estate Market 2021 Overview

  • Median Home Value: $159,157

  • 1-Year Appreciation Rate: +9.2%

  • Median Home Value (1-Year Forecast): N/A

  • Median Rent Price: $950

  • Price-To-Rent Ratio: 13.96

  • Average Days On Market: 60

  • Unemployment Rate: 5.2% (latest estimate by the Bureau Of Labor Statistics)

  • Population: 133,562 (latest estimate by the U.S. Census Bureau)

  • Median Household Income: $58,511 (latest estimate by the U.S. Census Bureau)


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Cedar Rapids real estate investing

2021 Cedar Rapids Real Estate Investing

The Cedar Rapids real estate investing community has had to adapt to a constantly evolving marketplace for years, and the last 12 months have been no exception. This time last year, in fact, investors in Cedar Rapids were focused primarily on rehabs and flips. Despite years of appreciation, profit margins remained intact, and distressed homeowners provided enough inventory to run a viable investing business. Fast forward to today, however, and the market looks completely different.

Since the Fed introduced lower rates to combat inactivity in the first quarter of last year, demand has increased exponentially. More buyers than anyone could have imagined began to actively participate in the market to take advantage of historically low borrowing costs. Today, the average commitment rate on a 30-year fixed-rate mortgage is about 3.06%, according to Freddie Mac. While up year-to-date, rates are still attractive enough to encourage more buyers to go shopping.

However, it is worth noting that the demand created by lower borrowing costs greatly outweighed supply; there are too many people looking to buy and not enough homes. As a result, homeowners have increased their prices accordingly. Since rates were initially dropped, the median home value in Cedar Rapids has increased nearly ten percent; that’s in addition to the previous eight years of appreciation seen in Cedar Rapids. Suffice it to say: real estate in Cedar Rapids is growing more expensive by the day, and investors had to adopt new strategies.

Where rehabbing once reigned supreme, long-term rental properties became the new norm. Investors began trading expensive rehabs for long-term rentals as soon as prices got too high. For starters, the profit margins on flips weren’t where they used to be. Investors were taking on too much risk with how much the market had appreciated. Secondly, interest rates are now low enough to help offset acquisitions acquired through traditional mortgages. With rates just over three percent, investors can increase their monthly cash flow from properties placed in operation. If for nothing else, lower monthly mortgage payments mean investors get to retain more of the rent they collect.

To be clear, the Cedar Rapids real estate investing community still has the opportunity to flip homes. This is because the city, as a whole, is still relatively affordable compared to its national counterparts. However, new indicators created in the wake of the Coronavirus have made rental properties more viable than ever, and it’s time investors considered adding them to their own portfolios.

2021 Median Home Prices In Cedar Rapids

The Cedar Rapids real estate market has seen its median home value increase since 2012. Thanks, in large part, to a strengthening economy, positive sentiment in the real estate industry, historically low mortgage rates, and a lack of available inventory, median home values have increased year-over-year for more than a decade. As recently as the first quarter of 2011, in fact, median home values in the Cedar Rapids housing market bottomed out at around $116,000. Since then, median home values have increased 37.2% and now rest somewhere in the neighborhood of $159,157, which bodes well for the Cedar Rapids real estate investing community.

To put things into perspective, median home values in the United States increased 69.5% over the same period of time. Today, the median home value in the United States is about $281,370. Following years of appreciation, it would appear that real estate in Cedar Rapids is still relatively affordable.

Cedar Rapids real estate news has improved on the home value front for a while. It is clear that property values have trailed behind the pace set by national trends, but the last decade has been impressive. With that in mind, it is safe to assume most of the city’s success within the real estate industry is directly correlated to the same indicators lifting markets across the country: growing optimism in the real estate sector, improving economic conditions, and a distinct lack of inventory. At the very least, more buyers can actively participate in the market thanks to improving working conditions, lower interest rates, and government stimuli. Still, there aren’t enough homes to meet the added demand. The resulting competition over available listings has driven up prices for years and will continue to do so.

Cedar Rapids Real Estate Market: 2020 Summary

  • Median Home Value: $144,672

  • 1-Year Appreciation Rate: +2.1%

  • Median Home Value (1-Year Forecast): +2.6%

  • Median Rent Price: $950

  • Price-To-Rent Ratio: 12.69

  • Average Days On Market: 63

  • Unemployment Rate: 2.5% (latest estimate by the Bureau Of Labor Statistics)

  • Population: 133,174 (latest estimate by the U.S. Census Bureau)

  • Median Household Income: $56,828 (latest estimate by the U.S. Census Bureau)

  • Percentage Of Vacant Homes: 7.02%

  • Foreclosure Rate: 1 in every 2,260 (4.4%)

Cedar Rapids Real Estate Investing 2020

Long-standing Cedar Rapids real estate trends were interrupted in the first quarter of 2020 when COVID-19 was officially declared a pandemic. Before the introduction of the Coronavirus, for that matter, real estate activity in Cedar Rapids appeared healthier than at any point in the previous decade. Nonetheless, the impact of the Coronavirus on the real estate market changed just about everything, not the least of which includes the way investors did business.

The new marketplace created in the wake of the pandemic directed investors away from traditional rehabs and towards long-term investments. In particular, the Cedar Rapids real estate investing community looked to rental properties to compensate for changing indicators. Rental properties enabled investors to take advantage of the lower borrowing costs put in place by the Fed. Rates were so low, in fact, that they simultaneously helped to offset years of appreciation and increased monthly cash flow from properties placed in operation. At the very least, lower monthly mortgage payments meant investors could increase profits from tenants.

That’s not to say investors couldn’t flip homes in Cedar Rapids in 2020. On the contrary, those lucky enough to find homes below market value were the lucky beneficiaries of attractive profit margins. However, as prices rose, coming across worthwhile profit margins became harder and harder. As a result, investors turned their attention to rentals; they weren’t the only game in town, but new indicators created by the pandemic made them the most viable exit strategy.

Cedar Rapids Real Estate Market: 2016 Summary

  • Median Home Price: $157,000

  • 1-Year Appreciation Rate: 4.7%

  • 3-Year Appreciation Rate: -4.6%

  • Unemployment Rate: 4.0%

  • 1-Year Job Growth Rate: 0.9%

  • Population: 128,429

  • Median Household Income: $54,465

Cedar Rapids Real Estate Investing 2016

Cedar Rapids real estate news was turning positive in 2016. Home prices and appreciation rates achieved slight improvements during the first half of the year, with real estate prices growing relative to the previous year. On the flip side, home prices and appreciation rates remained below the national average, with price trends in the previous three years undercutting the steady post-recession price trend. Nevertheless, the Cedar Rapids real estate market made positive headway in the first half of 2016, and the trend has continued today.

A variety of factors helped real estate in Cedar Rapids in 2016. Home affordability was impressive during the first six months of the year, as homeowners nearly paid half as much as the rest of the country. Other positive notes included improvements to the local economy and new housing construction, both of which continued to achieve small gains in the right direction. While below the national average, improvements favored Cedar Rapids real estate investing at the time.

The median home price was $157,000 during the second quarter, compared to the national average of $239,167. Home appreciation also experienced improvements in the second quarter. One-year appreciation rates reached 4.7%, while three-year rates were -4.6%. In the last three years, price trends have undercut the steady post-recession price trend, yet price appreciation in the last three years has helped homeowners build equity.

The highlight of the Cedar Rapids housing market in the second quarter of 2016 was home affordability. Homeowners paid 6.8% of their income to mortgage payments, compared to the national average of 15.8%. As a result, Cedar Rapids was among the most affordable areas in the country at the time. Conversely, the rate of new housing construction declined during that period. The level of construction was 17.1% below the long-term average. At the same time, the number of single-family housing permits also declined during the same period, dropping -8.7% compared to the national average of 10.6%.

Cedar Rapids Real Estate Market: 2015 Summary

  • Median Home Price: $156,900

  • 1-Year Appreciation Rate: 10.4%

  • Unemployment Rate: 4.4%

  • 1-Year Job Growth Rate: -0.4%

  • Population: 125,450

  • Median Household Income: $49,298

Cedar Rapids Real Estate Investing 2015

In 2015, the median home price in Cedar Rapids was $156,900. The national average, on the other hand, was $203,867. Despite the price difference, the city was making moves to close the gap. Between 2014 and 2015, appreciation rates reached as high as 10.4%. The national average was somewhere around 6.7%.

At the time, Cedar Rapids was a soft buyer’s market, as great deals on homes are widely available. The number of homes listed for sale was greater than the number of homes being sold, suggesting that demand was not where many would have liked it. However, rent prices were relatively stable in 2015, and availability wasn’t an issue for tenants.

Cedar Rapids in snow

The economy was a bit more polarizing in 2015. While unemployment was well below the national level, 4.4% and 5.5%, respectively, job growth was less than encouraging. In one year, Cedar Rapids managed to drop its unemployment rate by nearly one whole percentage point. While the rest of the country added jobs at a clip of 2.1%, Cedar Rapids actually lost jobs. Quite simply, local employment growth was poor and needed to improve.

Despite appreciating at a higher rate than the national average, Cedar Rapids real estate was more affordable than most markets across the country. In fact, homeowners in the area spent about 7.1% of their income on monthly mortgage obligations at the time; the national average was more than double that.

Cedar Rapids County Map:

Map of Cedar Rapids neighborhoods

Cedar Rapids Real Estate Market Summary

The Cedar Rapids real estate market has endured a particularly rough year, not unlike everywhere else. The pandemic threatened to bring about an end of nearly a decade’s worth of progress in one fell swoop. However, real estate in Cedar Rapids has continued on. As we get closer to the light at the end of the tunnel, all of the indicators are moving in the right direction. Employment is improving, enabling more people to participate in the market, and builders are already working hard to add more inventory. All things considered, the Cedar Rapids real estate market has done quite well, given the circumstances, and the future looks promising.

Have you thought about investing in the Cedar Rapids real estate market? To what degree does Cedar Rapids real estate investing interest you? We would love to know your thoughts on real estate in Cedar Rapids in the comments below:


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