With home values up over 40% since pre-pandemic, Iowa homeowners are sitting on substantial equity. But the market is shifting from strongly favoring sellers to more balanced conditions, with homes taking longer to sell and inventory increasing. Is it time to cash in or wait?
The housing market in 2025 sits at a pivotal crossroads. After years of unprecedented growth and conditions that heavily favored sellers, we're now seeing a gradual shift toward more balanced market conditions across many regions of the country.
Homeowners have benefited from the remarkable 44% increase in home values compared to pre-pandemic levels. This substantial equity gain has created a financial cushion that many sellers can use when making their next move. While national home values are projected to grow at a more modest 0.9% in 2025, local conditions may differ from these broader trends.
The pace of sales has also changed. Nationally, homes are taking longer to sell than during the pandemic-fueled frenzy, with the typical property going from listing to pending in 38 days. For homeowners considering selling, this means proper pricing and presentation are becoming increasingly important. The days of putting any home on the market and receiving multiple offers above asking price are becoming less common, though not entirely gone in certain neighborhoods and price points.
Sara DeWulf explains that today's real estate landscape requires a nuanced approach. With inventory levels rising nationally by 17.6% year-over-year, buyers have more choices and less urgency to make quick decisions. Nearly 23% of listings nationally recorded price cuts in January 2025, the highest share for that month since 2018.
With home values up 44% compared to pre-pandemic levels, many homeowners have accumulated significant equity. This built-up wealth provides flexibility when selling and can help fund your next purchase. Even if you bought relatively recently, the strong appreciation in many markets means you may have more equity than you think.
This equity advantage can be particularly powerful in today's market. It means you can potentially make strategic concessions in negotiations while still walking away with a healthy profit. It also provides options for your next move, whether you're upsizing, downsizing, or relocating to a different area entirely.
While we're moving toward a more balanced market nationally, conditions still generally favor sellers in many areas. The shift is happening gradually, which means 2025 represents a window where sellers can still benefit from favorable conditions before the market potentially shifts further.
Data shows that 1 in 4 sellers nationally still sold their homes for more than the asking price in December 2024. This indicates that despite increasing inventory, there remains strong buyer demand in many markets. The timing of your sale could impact your negotiating position.
Inventory levels have increased by 17.6% year-over-year nationally. This trend may continue as more homeowners overcome their hesitation about giving up low mortgage rates. As more homes come on the market, your property could face increased competition.
Selling earlier in the year might mean fewer competing listings in your neighborhood and price points. This can translate to more attention from buyers, potentially faster sales, and better terms—though local conditions in your location should be evaluated with a real estate professional.
Mortgage rates have been fluctuating between 6-7% throughout 2024, and predictions suggest they'll remain above 6% for most of 2025. If rates decrease even slightly, it could bring more buyers into the market who have been waiting on the sidelines.
Conversely, if rates increase, it could further affect buyer affordability. This unpredictability makes the current environment worth considering for sellers who want certainty rather than waiting to see how rates might change.
In many markets across the country, spring and early summer represent traditional high seasons for real estate activity. Homes often present better with seasonal landscaping, days are longer for showings, and families frequently prefer to move during summer break before the new school year begins.
Listing during historically active periods may mean your home is seen by more potential buyers. While seasonal patterns can vary by location, working with a local expert can help you identify the optimal timing for your specific situation.
If you owe more on your mortgage than your home is currently worth, selling now could leave you financially vulnerable. In this situation, you'd need to bring cash to closing to pay off your remaining mortgage balance. Unless you're experiencing financial hardship and considering options like a short sale with your lender, it's usually better to wait until you've built more equity.
With mortgage rates hovering between 6-7%, your next home purchase may cost significantly more in monthly payments than your current one, especially if you secured a low interest rate during 2020-2021. Run the numbers carefully before listing your home to ensure you can comfortably afford your next residence.
Many homeowners are experiencing the rate lock-in effect, where they're reluctant to give up their low-rate mortgages. If moving would strain your finances, consider waiting until either rates decrease or your income increases.
As inventory increases nationally (up 17.6% year-over-year), buyers can afford to be more selective. Properties needing substantial repairs or updates may struggle to attract strong offers in today's evolving market. If your home requires significant work, you might benefit from completing critical improvements before listing.
Today's buyers are particularly sensitive to issues that might increase their ongoing costs, such as outdated systems or maintenance concerns.
While national trends provide a general picture, real estate is ultimately local. If your local market shows signs of cooling, such as increasing days on market, growing inventory, or declining sale prices in your neighborhood, you might want to reassess your timing.
With nearly 23% of national listings experiencing price cuts in January 2025, accurate initial pricing is crucial. Working with a knowledgeable local agent to analyze comparable sales, current competition, and buyer expectations in your specific neighborhood can help you set the right price from the start.
As inventory increases and buyers have more options, professional marketing has become increasingly important. Today's effective listing marketing typically includes:
With more choices available, buyers can be less willing to overlook property flaws. Consider these preparations before listing:
The negotiation landscape has evolved as the market balances. Successful sellers now need to:
Before listing, determine your exact payoff amount from your mortgage lender. Remember that your payoff will be higher than your current balance due to prorated interest. Calculate your likely equity by subtracting your payoff amount from your expected sale price based on comparable properties.
Selling costs can significantly impact your net proceeds. Typical expenses include:
With current interest rates, your purchasing power may be different compared to when you bought your current home. Calculate how much home you can afford at current rates, and consider your options carefully before committing to sell.
The decision to sell is ultimately personal and depends on your unique circumstances. Market timing is just one factor to consider alongside your life goals, financial situation, and future plans. Consider how factors like climate risks and insurance costs might affect your current home's value and your next purchase.
When you're ready to make your next move in the Iowa housing market, make sure you pick a realtor who offers local expertise and personalized guidance.
