Pandemic housing market active for local realtors

By Audrey Posten, Times-Register

When the COVID-19 pandemic hit last spring, realtors around the country braced for a housing market downturn—one that mirrored the overall uncertainty of the U.S. economy.

“We thought, ‘Here we go,’” recalled Kim Brooks, who, with husband Richard, owns Marquette-based Brooks Realty.

“We worried people would be nervous about purchasing new homes,” added Ali Werger, with EXIT Realty in Monona.

But outside a slower first month, that really hasn’t been the case, said Allen Real Estate Company broker Nathan Trappe. In fact, it was the exact opposite.

“It’s busier than it’s ever been,” Trappe shared.

According to the National Association of Realtors, existing home sales were up 5.6 percent from 2019 to 2020, reaching their highest level since 2006. In Iowa, the market was even better. Data from the Iowa Association of Realtors showed a 10 percent jump.

Clayton County was no exception. In December 2019, the Iowa Association of Realtors recorded 115 closed sales for the year. During that same time period in 2020, there were 177.

“We sold a third more properties than ever before,” Trappe said of his agency, which has offices in Monona, Strawberry Point and Guttenberg. “And we doubled the amount of valuation sold in 2019.”

“It turned out to be a very active and strong market,” described Werger. “We were very fortunate that our industry was not negatively affected by COVID-19.”

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One of the biggest drivers of the housing boom: record-low interest rates.

“Under 2 percent on loans—that’s never been seen before,” Trappe said.

Buyers were also influenced by COVID-19 shutdowns and stay at home orders.

“People were at home and they had time to look,” said Werger. “They also realized they were out-growing their homes.”

Trappe agreed: “They got sick of being cooped up in a small apartment or a house that needed work. If they were renting, they thought, ‘Now, I want to buy. I want a bigger home.’”

Although sellers were a bit more wary inviting prospective buyers into their homes, especially early in the pandemic, the realtors said COVID-19 largely didn’t affect showings. 

“We’re all very careful, and people are more aware now. We wear masks and bring sanitizer. Buyers don’t bring a bunch of people with them,” said Kim Brooks. 

Even with more activities moving to virtual formats, buying a house is something that just has to be done in person. “Out of 13, 14 years, I couldn’t put on one hand the number of people who have bought a house without seeing it,” she remarked.

Buyers were a mixed group, ranging from first-time home owners to retirees looking to downsize. There was also an uptick in vacation home and rental property purchases. 

Trappe noted some relocations from cities like Minneapolis, Chicago and Des Moines.

“People are coming here because they’re able to work from home while also being close to the river,” he said.

Of the re-locators she had, Werger said they were easy to work with. Because they were coming from more populated areas, “you could put them on a busy corner lot. They think it’s amazing.”

The most sought-after home remains a three- to four-bedroom ranch style with a two-stall garage. Unfortunately, they can be hard to find in Clayton County.

“Here, towns have an abundance of two-story, older homes,” Werger said. “There are usually one-stall garages because it was built back when families only had one car, then it was never updated or there just wasn’t room.”

Acreages are popular too.

“A lot of people like to get the older farm houses on acreages. But they’re just not available,” acknowledged Richard Brooks. “When one comes up, they’re gone. Whoever finds out about it first is lucky.”

With the high demand, they often fall out of people’s price ranges.

“People have paid a little bit more for acreages because they want them,” Kim Brooks quipped.

Throughout 2020, people were generally willing to pay more for a property they really wanted. According to the Iowa Association of Realtors, the state’s median sales prices increased by 7.1 percent. 

For example, of the last two homes Allen Real Estate sold in Garnavillo, Trappe said one went $11,000 over the asking price, with three interested buyers, while the other went for $6,000 more than asking, with two buyers battling back and forth.

“We’re getting accepted offers within days of being on the market, and they’re selling over asking price, if priced correctly,” he added.

But while most people want move-in ready homes, some are willing to put the effort into making a property work for them.

“If they like the house and see potential in it, they think, ‘We could remodel part of it,’” said Kim Brooks. “We’ve seen people who want to build on, too, if they like where they’re at. Construction has really picked up.”

“But on the flip side of that is getting the materials in right now, and the carpenters are so busy,” Richard Brooks added.

Trappe, who also owns Allen Roofing and Construction, Inc., said materials are more expensive too.

“That’s another driver of the housing market, because people can’t afford to build,” he stated.

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Projecting into 2021, the realtors are hopeful for another good year.

“It will still be a seller’s market,” Kim Brooks said.

Even in the winter, things are going well.

“I’ve never been this busy in the winter time,” Trappe noted.

Their biggest issue now is having homes to sell to meet the demand.

Earlier in the pandemic, Werger said there was always good inventory, with a quick turnover rate.

“But now that constant flow is tapering down,” she explained. “There are still people actively looking, but they were spoiled with the options six months ago, so now they’re holding off.”

As of two weeks ago, Trappe said there were around a half dozen houses on the market in Monona.

“Last year, there were quite a few. This is super low,” he said.

Brooks Realty is finding it difficult in Marquette and McGregor, as well.

“We’ve been very busy. We have four offers right here sitting,” said Kim Brooks. “But man, we would’ve loved to have more listings, because we could have sold them. Marquette and McGregor, there’s such a limited amount of homes, and when a nice home comes open, it’s gone right away.”

With a market like this, the realtors said it will be important for buyers to be prepared. Know how much you’re willing to spend, and get pre-approved for financing with a lender.

“The quicker they get their financing in line, it speeds the whole operation up,” said Richard Brooks.

“If you’re not prepared,” cautioned Trappe, “you’ll miss out.”