Residential New Construction Coming Back to Life in
Scott and Rock Island Counties
The Quad Cities area residential new construction market is starting to show signs of life.
At the end of November a number of indicators pointed in a more positive direction. The inventory of new homes has steadily declined over the past two years, with a number of segments of the market approaching inventory levels that appear depleted, rather than excessive. The decline in overall unit sales from previous years has slowed, with November house closings and pendings exceeding those of ’08 by nearly 60% in Scott County, and with November closings in Rock Island County up by 40% for houses and condos combined. Year-to-date closings reflect an overall decline of 20% in unit sales in Scott County, but a 17% increase in unit sales in Rock Island County, compared to 2008. These figures are both improvements since the end of the previous quarter and scheduled December closings look to be even better.
Condos priced up to $175,000 continue to lead the way, with substantial sales increases in the entire market. In fact, this price range shows the strongest condo and home sales on both sides of the river, but suffers from an extreme shortage of available inventory, as first-time buyers take advantage of local, state and federal incentives. At this time there are only two new construction houses listed for sale up to $175,000 in the Scott and Rock Island counties. High land prices, high costs of construction and increasing regulatory costs plus heightened consumer expectations, continue to make the construction of homes in this price range a very difficult task in our market.
Most price ranges above the $175,000 level report either stable or declining sales when compared to 2008, but there are pockets of activity spread throughout the Quad Cities region at just about every range. The exception is condos above $300,000 in Scott County, which have experienced a 92% reduction in sales since last year.
However, as sales figures continue to recover, the impact is lessened by the declining available inventory of new construction homes in the QCA. As choices become more limited, consumers must increasingly choose between their “dream” of a new home and the existing home marketplace. Fewer buyers have the luxury of time that is often required to build a home to their specifications and decide to make the more expedient choice of purchasing an existing home instead. Fewer choices lead to fewer sales, fewer sales lead to still fewer choices and so on and so on. Reduced new home sales then become a “self-fulfilling prophecy” and not a result of lack of real demand. Restoration of confidence on the part of consumers, builders and lenders is required to restore this sector of our area’s economy to the level of several years ago.
Once again time, expectations, confidence and patience become key factors in this recovery.
A family-owned company since 1862, Ruhl&Ruhl REALTORS annually sells approximately 3,400 homes in eastern Iowa, western Illinois and southwestern Wisconsin. Caroline Ruhl is the President and owner of Ruhl&Ruhl REALTORS, and is the fourth generation of the Ruhl family to lead the residential brokerage and home services company. Headquartered in Davenport, Iowa, the company has 250 sales associates and 60 employees based in sales offices located in Bettendorf, Bellevue, Clinton, Coralville, Davenport, DeWitt, Dubuque, Maquoketa, and Muscatine, in Iowa, and in Moline, Illinois. In addition to residential sales, Ruhl&Ruhl offers services in relocation, new home sales, farm sales, property management, senior services, and mortgage services through 1862 Mortgage. For more information on Ruhl&Ruhl, visit their website at www.RuhlHomes.com
