Ames Patch Q&A With Dan Hunziker

Dan Hunziker, a third-generation broker, joined his family's real estate business in 2002. Hunziker & Associates has handled 34 percent of the homes listed in Ames and rural Ames so far in 2011. Hunziker & Associates' list to sales price ratio stands at 97 percent. We caught up with Dan to discover more about the area's residential real estate market.

Ames Patch: How has Ames fared during the housing bubble and recession?

Dan Hunziker: Ames' housing market prospered leading up to the housing bubble. We saw new sub divisions filling quickly with quality-built homes that were able to compete with resale home prices. We saw average sale prices rise from $164,000 in 2003 to $181,000 in 2007. During that same time the number of transactions increased. 

Ames, as the rest of the country, saw home sale prices drop and sales dip as we slipped into the recession. The Ames housing market was able to weather the recession well due to a couple of economic factors. For one we did not have an abundance of new construction housing sitting on the market nor had we seen resale housing sale prices anywhere near the inflated levels much of the rest of the country had experienced. We know that the economy is tied to the housing market and all real estate is local.

Historically speaking, Ames has had a stable economy. Ames is thick with state and federal jobs at places such as Iowa State University, National Animal Disease Center, the Iowa Department of Transportation and Mary Greeley Medical Center. Ames is also home to many companies that add to the city's economic stability. Sauer-Danfoss, Becker Underwood, , Hach, Sigler Companies and New Link Genetics are some of the bigger players. That being said, that’s not to say some homeowners didn’t feel the hit more than others, but overall, Ames foreclosure rate and jobless rate were among some of the lowest in the country.

Ames Patch: What is the housing market like today?

Hunziker: If we look at the numbers starting this year, January saw a 23 percent jump in active listings vs. January 2009 and an increase in listings that went sale pending over that same time period. Then from February to April we experienced some significant drops in new listings and listings that went sale pending in comparison with activity for that same time period in 2009. New construction starts are slow, while resale home prices dropped new construction costs have not and in most cases have increased along with tighter lending guidelines making it hard for the new construction market to compete.

The good news is that May and June of this year saw dramatic increases over same months in 2009 with new listings and sales pending. We have also seen a decrease in average days on market with June averaging 85. So far 144 homes have sold in Ames the first six months of this year. 

I would say we are moving away from a strictly buyer’s market and headed towards a neutral market. Two key factors that give the Ames housing market a positive outlook for today, tomorrow and the foreseeable future.

One, our unemployment rate is low. As of April we were at 4.1 percent compared with 6 percent in Iowa and 9.1 percent nationally.

Two, job growth. Ames has attracted many new companies and many are currently looking to or in the process of expanding. Iowa State Research Park is home to many of the community's thriving businesses. Web-Filings, which helps customers file electronic documents with the securities and exchange commission, is looking to bring an additional 250 jobs to its Ames location at a $20+ hourly wage. Boehringer Ingelheim Pharmaceutical looks to create 20 new jobs with an annual salary of $78,000. HIPRA, a Spanish animal health company will employ 60 people at its manufacturing facilities and an additional 20 when they open up its research facility by end of this year. Also moving to the Ames area is Flint Hills Resources a refining and chemicals company. Its Ames office will bring 20 new jobs and will focus on supporting the company’s ethanol facilities. In total those companies will bring more than 350 new jobs to Ames.

With mortgage rates at historic lows and pricing appearing to level out, I am optimistic that the housing market will only get better.

Ames Patch: How will pending foreclosures affect Ames?

Hunziker: I do not believe the Ames housing market has been affected by the foreclosure market. Our foreclosure rate has ranged from 1 to 3 percent and hasn’t affected pricing. Just 35 miles south, Des Moines was seeing a foreclosure rate of 15-20 percent. Again, Ames is somewhat sheltered from the economic downturn the majority of our country has and is still experiencing. As of today there are 15 homes in foreclosure in Ames and rural Ames with 922 active listings showing on our MLS.

Ames Patch: Is now a good time to buy or sell?

Hunziker: Someone in a position to buy a home should act sooner than later. Today’s housing market has some of lowest housing prices we’ve seen in years. Interest rates are at 50-year lows. Lending standards have become less rigid. For those looking to sell and buy up, now is as good as time as any.

Buying up in a down market is smart financially. Let’s say your present house is worth $200,000 but sells for 10 percent less. So instead of receiving $200,000 you receive $20,000 less or $180,000. Now let’s say you are looking to buy a home in the same distressed area for $350,000 and saved $35,000. Doesn’t that put you $15,000 ahead! Let’s not forget about interest rates, they may stay low for a while longer but sooner than later they will begin to rise. For those selling I have one thing to say, pricing your home to sell is key. If you price your home out of the market the more likely the home will be on the market. Studies show that homes which sell in the first month or two will get 96 percent of its asking price vs. 91 percent that have been on the market 4 months.

Ames Patch: What should a seller consider before renting their property?

Hunziker: Before someone takes the path of renting his home in lieu of selling, there are a few things to keep in mind. If you are considering renting because you are unable to get the price you wanted. Ask yourself:

• Can you charge enough to cover your costs such as mortgage payments, taxes, insurance, unexpected maintenance and upkeep? If you hire a management company take off roughly 10 percent of your rent for the calculation.
• Can your property handle the wear and tear? Children and pets can depreciate a house fast, and not everyone will care for home as you do.
• What if your tenants stop or can’t pay the rent? You may need legal representation and incur legal fees.