WEBSTER CITY — Almost daily we hear about rising home prices, skyrocketing apartment rents, materials shortfalls, a shortage of skilled homebuilding labor, high mortgage rates and a shortage of listings of all categories of residential property.

How are these trends affecting the market for homes in Webster City?

For the answers, the Daily Freeman Journal turned to longtime Webster City Realtor Tyler Abens of Abens Realty. Here’s what we learned.

Q What does the supply of homes for sale in Webster City look like this spring?

Abens: “We’ve had a low supply of property for sale over the winter. Mild winter weather made looking at properties easier for buyers. Those two factors have kept the market strong. Moving into spring, we definitely need new listings.

“No new homes were built in Webster City in the last three years. Eight speculative (spec) homes were sold in 2017, 2018 and 2019. The builder, Ridge Development, is listing four new single-family units in early April. These homes were started last September and are just finishing out now. They’re three-bedroom ranch homes with a range of amenities. Basements are unfinished. Listing prices will be $340,000 to $390,000.

“We’ve worked with Brian (Ridge) before. His choice of colors reflect what’s popular right now without being unique; greys and tans predominately. Bedrooms are carpeted. There’s luxury vinyl plank floors in the great room. Owners’ suites have a large bedroom, bath and walk-in closet. The two additional main-floor bedrooms share a bath. There’s main-floor laundry — a very popular feature — and in the higher price ranges a choice of covered patio or fireplace. Buyers will get an allowance to select the major appliances they prefer.”

Q: Okay, these are some of the higher-end new homes on the market; what about lower-priced, or starter, homes?

Abens: “We’ve had consistently low inventory of starter homes — those selling for $70,000 or less — for the last few years. These homes are popular with first-time buyers, those willing to put some work into the homes themselves, and investors. Since local apartment rental rates have gone up, we have a very competitive group of local investors interested in these properties for the income they provide.”

Q: Interest rates are higher today than in the past. What financing and loan options do local buyers have right now?

Abens: “We have three strong local banks and a credit union to work with on home loans in Webster City. Conventional 15- or 30-year fixed rate loans with 5 to 10% down payments are still the most common loans we see at closings. Today’s interest rates are 6.1 to 6.7%; they just came down again — and that always improves the affordability of monthly payments.

“If the house and buyer qualify, FHA (Federal Housing Administration) loans are available at 3.5% for first-time buyers, or VA (Veterans Affairs) loans for veterans of U.S. armed forces at 0% down. USDA (United States Department of Agriculture) rural loans with 0% down payment are another option, based on a sliding income scale.

“The reality is, there’s very limited funding for all of these loan types, so most buyers will end up with conventional loans.

“We were spoiled with 2 to 3% interest rates over the last 15 years, but those weren’t typical, and won’t likely come back. Over the last 40 years or so, 6 to 7% is a normal interest rate for home financing. That’s where we are today.”

Q: There’s lots of talk about “affordable housing.” Aside from getting a lower interest rate, what does “affordable” really mean today in Webster City?

Abens: “It’s a great question and very, very individual in nature. There was a time, only a few years ago, when many people dreamed of building a new, custom home. That’s become far more expensive today, so a nicely-featured spec home, possibly with some finishing choices, is a good option.

“Affordable really comes down to living within your means. With higher home prices and interest rates over the last three years, it means you can’t buy as much home for the same money. Buyers have to temper their expectations.”

Q: What features are most valued by today’s buyers?

Abens: “I have to say it really hasn’t changed much over the years. For women, it’s kitchens and bathrooms; for men, garages, basements and yards. It’s all about where people spend most of their time.

“If you’re remodeling and looking to add value to your home for possible future sale, you can’t do any better than adding bedrooms and bathrooms. These are always great investments.”

Q: How competitive is Webster City with neighboring towns?

Abens: “We still see a considerable number of people employed in Fort Dodge who prefer to live elsewhere. In this market, we compete with Humboldt, another similarly-sized small city with about a 20-minute commute to Fort Dodge.

“When we meet prospects like this, we become a salesman for Webster City. We give them community tours, showcasing our parks, trails, schools, library and Fuller Hall. These are things that made Webster City a great community in the past. They still do.

“Ames has become very expensive for first-time or mid-market buyers. They’re looking for homes in Jewell instead, or maybe an acreage south of Webster City. Both of these options have grown in popularity in the last three years.

“At the end of the day, Webster City is big enough to meet most of your needs, and small enough to know you and your family. That hasn’t changed. It’s still a great place to live.”

Q: Who’s moving to Webster City today?

Abens: “Historically, it’s a mix of people moving within town; people downsizing from family to retirement homes; retired farmers moving to town. Every year new people discover Webster City, coming here for jobs in the school district, as retail store managers, or to take jobs at Van Diest Medical Center, or one of our manufacturers.

“A new trend began during the pandemic. People moved here from the west coast — California, Oregon, Washington state. They may have been escaping stricter regulations in their home states, seeking a small-town way of life, or just trying to reduce their cost of living. Some grew up in Iowa and just want to come home.”

Q: Has there been any change in the seasonality of home buying and selling here?

Abens: “Spring is still the best time to list your home, or begin the buying or selling process for most people. The most typical cycle we see, and it’s geared to the school year, is to buy in April, May or June. Closing will take anywhere from 45 to 60 days, so you’re looking at a June or July close. That means you move when the weather is at its best, and there’s time to settle into a new place before the new school year starts.”