We’ve made it a quarter of the way through the new year. So far, this year has brought its own bout of challenges and successes. This Q1 rental market report will discuss some of the factors that have affected the rental and real estate investing market. We’ll take a look at: COVID-19, supply and demand in the Des Moines metro and surrounding areas, overall rental market data for RPM Iowa, and up and coming markets. Let’s get into it.
COVID-19 impact on the Des Moines rental market
It’s been a little over a year since COVID-19 has been noted as an international pandemic. The three biggest factors for renters are rent payment, evictions and maintenance. We’ll touch on each in the sections below.
With the vaccine becoming more accessible to the general public from state to state, things are changing. The unemployment rate is descending at a slow pace. The official number of unemployed Americans is sitting at 10.1 million, according to the Labor Department.
There are two state programs opening up to assist with rent and mortgage payments as of Monday, March 29th 2021. The Iowa Rent and Utility Assistance Program helps eligible renters with rent and utility bills for up to 12 months. And the Iowa Homeowner Foreclosure Prevention Program assists with mortgages for up to four months. For more information, you can go to the Iowa Finance Authority website.
The Federal Eviction Moratorium has been extended just two days before expiration. It is now extended to June 30th of 2021.The CDC is extending the order to prevent the further spread of COVID-19. Studies have shown that evictions can cause death from diseases since people are forced to live in more crowded housing.
Maintenance is back up and running again – with new rules. Masks and gloves are still required for house visits, per RPM Iowa’s in-house regulations. Our vendors workloads have been basically back to what we know as normal,” Taylor McDonald, RPM Iowa’s Maintenance Coordinator said. “We are appreciative of everyone’s cooperation, even now. Tenants are wearing their masks and remaining socially distanced during maintenance visits, if they need to or choose to be in the home during a visit.”
Supply and demand in the Des Moines metro
Holding steady in the Q1 rental market report, the real estate market has remained intensely competitive. New construction is even becoming less and less available. “People are finding it hard to put their homes on the market, because there aren’t as many options for where to go after a home is sold.” Explained Ben Flurely, General Manager of RPM Iowa. “It’s a catch-22 situation.”
Overall rental market data for RPM Iowa
The chart in this section mirrors average rents by city and number of bedrooms (per single-family home). The average rent in the DSM metro for RPM Iowa sits at around $1,467. Rental rates have increased over the past couple of years and we have followed the trend, as our numbers below will reflect.
RPM Iowa rents broken down by city and bedroom:
Ankeny – $1,586
- 2 Bedroom: $1,171
- 3 Bedroom: $1,593
- 4+ Bedroom: $1,995
Des Moines – $1,364
- 2 Bedroom: $1,217
- 3 Bedroom: $1,334
- 4+ Bedroom: $1,540
West Des Moines / Clive / Waukee / Urbandale – $1,755
- 2 Bedroom: $1,250
- 3 Bedroom: $1,520
- 4+ Bedroom: $2,495
Ames – $1,359
- 2 Bedroom: $835
- 3 Bedroom: $1,377
- 4+ Bedroom: $1,866
Future opportunities: What’s hot right now
“These markets hold steady when it comes to rapid growth,” said Ben Flurey, General Manager at RPM Iowa. Like mentioned in the 2020 roundup article, Bondurant and Grimes have grown by about 80% since 2010 per the Des Moines Register. Johnston has also grown by about 31% during that same timeframe.
Bondurant & Altoona
Some of the growth shown in this Q1 rental market report is due to the brand-new Amazon facility in Bondurant which created 1,000 new jobs. On November 4, 2020, the Business Record reported that Amazon is building a $55 million warehouse one mile west of their fulfillment center. Project Omega will be the third Amazon facility in Iowa.
The Outlets of Des Moines opened in 2017 and have boosted Altoona’s economy by creating jobs and plenty of foot traffic. With new jobs comes more housing opportunities. Buying in the Bondurant / Altoona area will appreciate over time as the area continues to develop.
And don’t forget about Adventureland. The amusement park will be hosting concerts, festivals, and a brand new roller coaster, Altoona will be swarming with foot traffic this summer.
Grimes & Johnston
“Amazon is a big part of the growth in these areas,” said Flurey. The city of Grimes is also constructing a $250 million mixed-use sports complex. It will be the largest turf sports venue in the Midwest, as stated by the Grimes Chamber and Economic Development. It is expected to bring 1.5 million visitors a year. The sports complex will encourage other investors to build restaurants, housing accommodations, and retail shops.
Johnston is going through their own renovations, too. An estimated $27-31 million City Hall and community site is currently under construction and almost completed, on the east side of Merle Hay Road between NW 62nd Avenue and NW 63rd Place. Commercial buildings will open some time later after the new City Hall.
The DSM Metro is growing!
It’s been over a year since the start of the pandemic, and it has brought a lot of industries through the wringer. Fortunately, the rental properties managed by RPM Iowa have not experienced the same level of impact as other property management companies, even within the metro.
With state of the art facilities, business fulfillment centers and warehouses being built, the DSM Metro is growing, and fast. There’s an opportunity to expand your wealth along with the development of these cities. Investing in real estate is a great pathway to financial freedom – so if you’re looking to start your portfolio, we’re ready for you. Schedule a consultation with our Real Estate Investment Advisor or Business Development Manager, whenever you’re ready!