This income level is extremely rare in Iowa, roughly corresponding to the top one percent of earners.
These affluent households have been active in Iowas homebuying market, particularly in the period from 2018 through 2023.
Clearly, the luxury segment expanded rapidly in the late 2010s and especially during the pandemic-era housing boom.
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Indeed, by late 2022 and 2023, nearly half of luxury home purchases nationwide were all-cash.
Iowas elite buyers mirrored this pattern.
From 2018 to 2023, the state saw consistent appreciation in home values.
In the luxury tier, price growth was even more pronounced during the pandemic boom.
Many properties crossed into million-dollar territory due to rapid appreciation.
In 2019, $1M could buy around 2,900 sq.
ft. on average; by mid-2022 that budget bought only ~2,624 sq.
This was because demand pushed prices up faster than home sizes.
Largely, they purchase owner-occupied single-family homes, often large and custom-built, with amenities fitting an upscale lifestyle.
Many of these properties are in affluent suburban neighborhoods or acreage estates.
These were typically empty-nest professionals or retirees downsizing from large houses.
Upsizing, Downsizing, or Second Homes?
The answer varies by life stage.
Many were moving from a starter or mid-range home into a forever home.
For example, a successful business owner in her 40s might sell a 2,500 sq.
ft. house to make it custom-build a 5,000 sq.
ft. home on an acreage.
The low interest rates of 20192021 made upsizing financially attractive even at high price points.
This cohort of buyers drove much of the move-up market in suburban Iowa.
Some did start downsizing not necessarily to save money, but for convenience and lifestyle reasons.
A number of affluent baby boomers chose to trade their large suburban family homes for something easier to maintain.
In Iowa, downsizing might mean moving to a luxury townhome or condo, or a smaller single-story home.
However, this trend was modest.
Many boomers simply aged in place in the homes they already owned rather than moving.
With remote work becoming feasible, many affluent families felt freer to invest in a getaway.
Iowas high earners joined this wave by purchasing lake homes and rural retreats.
A prime destination was the Iowa Great Lakes (Lake Okoboji region in Dickinson County).
Other popular second-home locales for Iowans included out-of-state spots like Arizona and Florida for winter homes.
Urban vs.
Rural Preferences
Do Iowas richest buyers prefer city life or country quiet?
That said, a subset of high earners do choose urban living.
Rural Luxury Estates
Beyond the suburbs, many of Iowas wealthy showed an interest in rural luxury.
During 20182023, some high earners purchased hobby farms or country estates on the fringes of metro areas.
Correspondingly, Des Moines saw the most dynamic luxury market from 2018 to 2023.
Many of these buyers purchased luxury homes in communities like North Liberty, Coralville, and suburban Iowa City.
In Cedar Rapids (Linn County), industrial and tech executives (e.g.
While million-dollar sales were less frequent here than in Des Moines, they did occur.
The Quad Cities (e.g.
This mansion, originally built by a local CEO, spanned 25,000 sq.
ft. with 52 rooms (8 bedrooms, 15 bathrooms) and lavish amenities.
Even more modest lake homes in Okoboji routinely sold in the high six or seven figures.
Small Towns and Rural Areas
In smaller towns and rural counties, high-income home purchases were sporadic.
Demographics and Characteristics of High-Income Buyers
Who are these $500k+ earners buying homes in Iowa?
Many are at the peak of their careers.
High-income homebuyers in Iowa during 20182023 were usually repeat buyers rather than first-time buyers.
By the time a household is earning $500k annually, they have likely owned property before.
There are also agricultural entrepreneurs with incomes bolstered by commodity booms, who invest in upscale homes.
A striking characteristic of high-income buyers is their financial capability in transactions.
As noted, a large portion can pay cash or make down payments far above the norm.
This gave them an advantage in competitive bidding situations.
Lifestyle Choices
Its also worth noting some lifestyle choices of this group.
A number of high-income households are philanthropic and community-oriented (e.g.
Demographically, most high-income buyers in Iowa are White, reflecting the states overall composition at that income strata.
Few high-end homes were built or sold in 20082010 as credit tightened and even wealthy buyers grew cautious.
By contrast, 20182023 was a period of acceleration and volatility.
By the early 2020s, Iowa was seeing well over a hundred $1M+ transactions annually.
Buyer Psychology and Market Dynamics
Another difference is buyer psychology and external factors.
In 20082017, especially post-recession, high-income buyers were relatively cautious.
One can also compare how supply and construction differed.
The 2010s saw relatively limited construction of high-end homes in Iowa until the latter part of the decade.
By 20182023, builders were actively targeting the upscale market, especially in places like suburban Des Moines.
There was more speculative building of $500k+ houses because builders knew there was a stronger pool of buyers.
What changed was the volume and price levels.
The top end of the market expanded its boundaries in this recent period, setting new benchmarks.
