Cedar Rapids, IA Real Estate Market Trends & Analysis [Updated 2020]

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The Cedar Rapids real estate market has doing everything in its power to put the latest recession in the rear view mirror, and things couldn’t be going better for the Iowa city. While it still has a ways to go, encouraging improvements have been put in motion that will lay a strong foundation for the future.

The Cedar Rapids real estate market has had the pleasure of benefiting from several national trends. Similar to everywhere else, values have risen in the wake of three very specific indicators: positive sentiment in the real estate industry, a strong economy, and a distinct lack of available housing. While not unique to the city, these three indicators have combined to lift up the local housing market. While real estate in Cedar Rapids is more valuable than it has ever been, however, it has the added benefit of affordability. Despite almost nine consecutive years of price increases, real estate in Cedar Rapids remains affordable. 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 2020 Overview

  • 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%)

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Cedar Rapids real estate investing

2020 Cedar Rapids Real Estate Investing

Cedar Rapids real estate news has been good for the first part of this year. Not unlike every other market across the United States, distressed assets have demanded the attention of investors in the local real estate market. At the very least, distressed assets are most likely in the possession of motivated sellers, which significantly increases the chances of investors not only securing a deal, but securing a deal with attractive profit margins. That said, the city’s relatively high foreclosure rate has been a blessing in disguise for local real estate investors.

The Cedar Rapids real estate market is full of potential, at least when it comes to distressed inventory. In particular, local real estate investors should pay special considerations to pre-foreclosure and auction inventory. Each making up 40.7% of the city’s distressed inventory, pre-foreclosures and auctions are the most abundant assets owned by “motivated sellers.” The Cedar Rapids real estate investing community should take note of where the city’s foreclosures are and adjust their marketing efforts moving forward.

As their names suggest, pre-foreclosures are the assets of homeowners who have fallen behind on payments. Their inability to keep up with mortgage obligations have placed their homes at risk of falling into foreclosure. Consequently, pre-foreclosures aren’t in foreclosure, but rather at risk of it. Nonetheless, homeowners behind on payments may be more motivated to sell their homes — that, or face falling into foreclosure at a later date. Therein lies the real reason investing in local real estate remains so attractive: the state’s high distribution of distressed homes suggests more homeowners will be motivated to sell. Those behind on payments are better off selling to investors than losing their properties to foreclosure. For their auction counterparts, investors simply need to attend a local auction. There, investors should be able to bid on homes for less than their market value, and perhaps secure a deal with attractive profit margins.

Of course, knowing where to find real estate deals is only going to take investors so far. Deals need to follow an exit strategy, which begs the question: What should investors do with the properties once they acquire them? Which exit strategies does the Cedar Rapids real estate market cater to the most?

At the moment, the Cedar Rapids real estate investing community may choose between any of today’s most popular exit strategies: rehabbing, wholesaling, and renting. Current economic conditions suggest each is a viable option in today’s market. However, there are a few indicators tipping the scales in favor of long-term rental strategies.

The city’s historically high prices, for example, have eaten into profit margins. The more homes cost, the less likely investors will be able to acquire deals with attractive profit margins. As a result, the Cedar Rapids real estate investing community may want to strongly consider building a rental portfolio. Several years of cash flow may easily offset higher acquisition costs, especially in a market as “affordable” as Cedar Rapids. In as little as a few years, investors could make up for the higher purchase prices and still have a cash flowing asset. On top of everything else, inventory remains low, which will force willing and able buyers to continue renting. The lack of available listings will actually work in favor of landlords, effectively making it easier to fill vacancies.

2020 Foreclosure Statistics In Cedar Rapids

According to RealtyTrac, Cedar Rapids has a relatively high distribution of distressed properties. With approximately one out of every 2,260 homes in some stage of distress (default, auction or bank owned), the local market boasts a foreclosure rate of 4.4%. The United States, as a whole, has a 3.9% foreclosure rate.

Cedar Rapids real estate trends have witnessed a higher foreclosure rate than the national average, and there’s nothing to suggest the trend won’t continue for the time being. Foreclosures have actually risen in the last year. As recently as the end of last year, “the number of properties that received a foreclosure filing in Cedar Rapids, IA was 43% lower than the previous month and 80% higher than the same time last year,” according to RealtyTrac. The year-over-year drop should be considered by the Cedar Rapids real estate investing community, as it will impact their ability to find motivated sellers. By the real estate information company’s calculations, Cedar Rapids is now home to at least 150 foreclosures. The largest distributions of said distressed homes may be found in the following neighborhoods:

Foreclosures in Cedar Rapids

2020 Median Home Prices In Cedar Rapids

The Cedar Rapids real estate market has seen its median home values increase for the better part of a decade. 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 nearly nine consecutive years. As recently as the first quarter of 2011, in fact, median home values in the Cedar Rapids housing market bottomed out around $116,000. Since then, median home values have increased 24.7%, and now rest somewhere in the neighborhood of $144,672, which bodes well for the Cedar Rapids real estate investing community. To put things into perspective, median home values in the United States increased 46.1% over the same period of time. Today, the median home value in the United States is about $244,054.

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 nonetheless impressive. With that in mind, it is safe to assume the majority of the city’s success within the real estate industry is directly correlated to the same indicators lifting up 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 are able to actively participate in the market thanks to improving working conditions, but there simply aren’t enough homes to meet the added demand. The resulting competition over available listings has served to drive up prices for years.

Prices in the Cedar Rapids real estate market are expected to continue rising for the foreseeable future, to the tune of about 2.6% in the next year. The tempered appreciation rate is not consistent with a decline in market health, but rather a return to normalcy. If for nothing else, there’s simply no more room for prices to continue increasing at their current pace; a temperance has been expected, and it appears to be happening at this very moment.

Cedar Rapids home values

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 to 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%. Price trends in the last three years have undercut the steady post-recession price trend, yet price appreciation in the last three years has helped homeowners to 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%. Cedar Rapids was among the most affordable areas in the country at the time. Conversely, the rate of the new housing construction declined during that period. The level of construction was 17.1% below the long-term average, while 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 difference in price, 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 were greater than the number of homes being sold, suggesting that demand was not where many would have liked it to be. 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’s time, 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 rate that was higher 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

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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