Iowa has not gone unscathed from the effects of the credit crunch but generally, home values are not going to fall heavily unlike other states. Known to many to have an agricultural economy, Iowa is at risk of losing its state revenues from corn production once ethanol-based fuel will be adopted by majority of cost-conscious drivers.

Iowa City has always benefited from the students of the University of Iowa who are searching for residences. Like most university towns, these students are a sure market for property owners. However, property prices are still expected to drop by 7 percent this year. Until such time that the real estate industry rebounds, these property owners are still waiting for their home’s values to rise.

Likewise, Sioux City is also home to a few academies like Briar Cliff University and Morningside College. But homeownership is on a slowdown in the area when adjustable rate mortgages are resetting to higher unaffordable interests. The Sewer City is expected to have home prices down by 6 percent in 2009.

Davenport’s manufacturing sector is the lifeblood of the economy but its agricultural base has always been a vital contributor to the residents’ livelihood. During the heydays of real estate, only a few invested in properties. Today, those who purchased their homes two years ago are already facing foreclosure as a big chunk of mortgage payments have been delinquent already. RealtyOutlook.com expects home values to fall by 7 percent in 2009.

Des Moines, headquarters of the country’s largest insurance companies, is crippled by tight credit markets in the area. As such, the city’s low home purchases are forecasted to linger in 2009 with home values falling by 6 percent.

Cedar Rapids is also experiencing the same plight. Foreclosures are building month after month only to be matched by limited buying. It must be remembered that the city once had a strong real estate market with prices higher than other areas in the state. Today, home values are on a free fall that RealtyOutlook.com forecasts prices to fall further by 6 percent.