Top 5 Residential Real Estate Investment Markets in Iowa

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By Trent Seigfried Updated May 28, 2024
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Edited by Michael Yessis

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Albia is home to the best residential real estate investment market in Iowa.

The 52531 zip code in Albia presents the greatest opportunity for investors among the 568 individual real estate markets in Iowa we evaluated. We looked at property values, population trends, and six other metrics for each market. We used that data to calculate each market's InvestScore.

Top 5 Iowa residential real estate markets

RankCity InvestScore Affordability Property value appreciation
1Albia1002.150.63%
2Atlantic99.92.441.46%
3Ottumwa96.62.045.15%
4Jefferson95.72.856.66%
5Webster City93.52.244.20%
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1. Albia

We've identified the 52531 zip code in Albia as Iowa's best real estate investment market. Here's why.

πŸ”Ž Key data about Albia

Data pointValueRank in state (of 568 markets)
Zip code52531N/A
InvestScore 100Highest
Typical property value $158,314[1]32nd lowest
Five-year appreciation 50.63%[2]9th highest
Household income $75,000[3]51st highest
Affordability ratio 2.19th most affordable
Five-year population growth -2.1%[4]99th highest
Unemployment rate 2.6%[5]39th lowest
Property taxes $2,215[6]42nd lowest
Educational attainment 25.1%[7]80th highest
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Albia (zip code 52531) is the best residential real estate investment market in Iowa. It has the 9th highest property value appreciation among markets we evaluated, with a 50.63% appreciation of the typical property over the last five years.

Albia is the 9th most affordable market among the 568 Iowa markets we evaluated, with an affordability ratio of 2.1.

2. Atlantic

The 50022 zip code in Atlantic is Iowa's second-best residential real estate investment market.

πŸ”Ž Key data about Atlantic

Data pointValueRank in state (of 568 markets)
Zip code50022N/A
InvestScore 99.92nd highest
Typical property value $140,734[8]20th lowest
Five-year appreciation 41.46%[9]34th highest
Household income $59,538[10]107th highest
Affordability ratio 2.418th most affordable
Five-year population growth 6.0%[11]39th highest
Unemployment rate 1%[12]7th lowest
Property taxes $2,152[13]39th lowest
Educational attainment 24.3%[14]82nd highest
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The 50022 zip code in Atlantic features a typical property value of $140,734, the 20th lowest in the state.

Property values have appreciated 41.46% over the past five years, the 34th highest increase among evaluated markets in the state. Atlantic homes have an affordability ratio of 2.4, the 18th most affordable in the state.

3. Ottumwa

The 52501 zip code in Ottumwa comes in at No. 3 in our ranking of residential real estate investment markets in Iowa.

πŸ”Ž Key data about Ottumwa

Data pointValueRank in state (of 568 markets)
Zip code52501N/A
InvestScore 96.63rd highest
Typical property value $112,164[15]6th lowest
Five-year appreciation 45.15%[16]17th highest
Household income $55,801[17]123rd highest
Affordability ratio 2.07th most affordable
Five-year population growth 2.9%[18]56th highest
Unemployment rate 4.4%[19]90th lowest
Property taxes $1,863[20]20th lowest
Educational attainment 19.4%[21]113th highest
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With a typical property value of $112,164, Ottumwa's 52501 zip code features the 6th lowest property values in the state.

Ottumwa homes have an affordability ratio of 2.0, the 7th most affordable among the markets we evaluated.

4. Jefferson

The 50129 zip code in Jefferson ranks No. 4 among Iowa's residential real estate investment markets.

πŸ”Ž Key data about Jefferson

Data pointValueRank in state (of 568 markets)
Zip code50129N/A
InvestScore 95.74th highest
Typical property value $153,124[22]29th lowest
Five-year appreciation 56.66%[23]the highest
Household income $55,067[24]the highest
Affordability ratio 2.853rd most affordable
Five-year population growth 5.7%[25]40th highest
Unemployment rate 2.6%[26]39th lowest
Property taxes $1,835[27]16th lowest
Educational attainment 21.9%[28]98th highest
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Property values in Jefferson's 50129 zip code have seen the the highest increase among evaluated markets in the state, with an appreciation of 56.66% over the past five years.

Jefferson's affordability ratio of 2.8 makes it the 53rd most affordable among the 568 markets we evaluated.

5. Webster City

The 50595 zip code in Webster City rounds out our top five residential real estate investment markets in Iowa.

πŸ”Ž Key data about Webster City

Data pointValueRank in state (of 568 markets)
Zip code50595N/A
InvestScore 93.55th highest
Typical property value $138,183[29]18th lowest
Five-year appreciation 44.20%[30]24th highest
Household income $63,782[31]24th highest
Affordability ratio 2.212th most affordable
Five-year population growth -3.4%[32]112th highest
Unemployment rate 4.3%[33]86th lowest
Property taxes $1,606[34]6th lowest
Educational attainment 23.6%[35]89th highest
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Property values in Webster City's 50595 zip code rose 44.20% over the last five years, ranking the city 24th highest among evaluated markets in Iowa.

Webster City homes have an affordability ratio of 2.2, the 12th most affordable among the markets we evaluated.

How we rank residential real estate markets in Iowa

We evaluated 568 markets on eight metrics, and then assigned an InvestScore based on their weighted and combined rankings. Each market corresponds to a specific zip code in Iowa.

What is InvestScore?

InvestScore is a score on a scale of 0 (worst in state) to 100 (best in state) that estimates the residential real estate investment potential of a given market. It takes into account a suite of key data points for each city.

  • Typical property value: This measures the typical home value in this zip code, according to the Zillow Home Value Index. It reflects the typical value for homes in the 35th to 65th percentile range, including all homes, with the numbers smoothed and seasonally adjusted. We prefer lower property values, which indicate both more room for growth and a greater ease of purchase. We assign a weight of 20% to typical property values.
  • Property value appreciation: This measures how much property values have increased in the area over the past five years, according to the Zillow Home Value Index. We prefer a higher appreciation, as it indicates better returns on housing. However, past performance isn't indicative of future results. We assign a weight of 20% to property value appreciation.
  • Median household income: This is the inflation-adjusted median household income in the zip code, according to U.S. Census American Community Survey data. We prefer a higher household income, as it indicates local residents have more income to spend on housing. We assign a weight of 10% to median household income. We assign a weight of 10% to median household income.
  • Affordability ratio: This is the ratio of the typical home value to the median household income in the area. A lower ratio is better because it means more households can afford a home, which indicates higher demand. We assign a weight of 15% to the affordability ratio.
  • Population growth: This is how much the area's population has grown over the past five years, according to U.S. Census estimates. Higher is better, as it indicates residents are moving into the area at a rapid clip. We assign a weight of 10% to population growth.
  • Unemployment rate: This is the unemployment rate in the area, according to U.S. Census data. We prefer a lower rate, as it indicates the availability of steady employment in the area, meaning residents will find it much easier to afford homes. We assign a weight of 15% to unemployment rate.
  • Property tax: This is the median real estate property tax paid in the area, according to U.S. Census estimates. We assign a weight of 10% to property tax.
  • Educational attainment: This is the percentage of residents in the area that have obtained a bachelor's degree or better, according to U.S. Census estimates. We prefer a higher rate because it indicates  local residents who have higher earning potential and thus should be able to afford homes. We assign a weight of 15% to educational attainment.

Disclaimer: The information contained in this article isn't intended as, and shall not be understood or constituted as, financial advice. The information in this article isn't a substitute for financial advice from an investment professional or real estate agent who is aware of the facts and circumstances of your financial situation or the specifics of any individual property.

Article Sources

[1] Zillow – "Zillow Home Value Index". Updated March 31, 2024.
[2] Zillow – "Zillow Home Value Index, difference over last five years". Updated March 31, 2024.
[7] U.S. Census – "U.S. Census Table S1501 - Educational Attainment 2018-2022". Updated 2018-2022.
[8] Zillow – "Zillow Home Value Index". Updated March 31, 2024.
[9] Zillow – "Zillow Home Value Index, difference over last five years". Updated March 31, 2024.
[14] U.S. Census – "U.S. Census Table S1501 - Educational Attainment 2018-2022". Updated 2018-2022.
[15] Zillow – "Zillow Home Value Index". Updated March 31, 2024.
[16] Zillow – "Zillow Home Value Index, difference over last five years". Updated March 31, 2024.
[21] U.S. Census – "U.S. Census Table S1501 - Educational Attainment 2018-2022". Updated 2018-2022.
[22] Zillow – "Zillow Home Value Index". Updated March 31, 2024.
[23] Zillow – "Zillow Home Value Index, difference over last five years". Updated March 31, 2024.
[28] U.S. Census – "U.S. Census Table S1501 - Educational Attainment 2018-2022". Updated 2018-2022.
[29] Zillow – "Zillow Home Value Index". Updated March 31, 2024.
[30] Zillow – "Zillow Home Value Index, difference over last five years". Updated March 31, 2024.
[35] U.S. Census – "U.S. Census Table S1501 - Educational Attainment 2018-2022". Updated 2018-2022.

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