Location: Butler County, IA | Metro: Butler County, IA
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $690 |
| 1 Bedroom | $710 |
| 2 Bedrooms | $930 |
| 3 Bedrooms | $1,100 |
| 4 Bedrooms | $1,320 |
| 5 Bedrooms | $1,531 |
| 6 Bedrooms | $1,715 |
| 7 Bedrooms | $1,852 |
| 8 Bedrooms | $1,945 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $930 | $134,309 | 0.69% | D |
| 3BR | $1,100 | $173,197 | 0.64% | D |
U.S. Census Bureau data (2024)
The real estate market in ZIP 50602, Allison, IA, presents a nuanced landscape for landlords and small-portfolio investors. With a median home value at $164,725, the area reflects a stable residential market that is unlikely to experience significant volatility in the near term. The absence of data on reduced listings and days on market (DOM) suggests that the local housing market is not currently under pressure from distressed sales or prolonged listing periods, which typically indicate a softening market.
The setup for pricing power over the next 12-24 months appears favorable, given the stability implied by the median home value and the lack of distressed properties entering the market. This scenario supports maintaining current property values without aggressive price adjustments. However, the long-term appreciation thesis for ZIP 50602 remains limited due to the overall economic conditions and demographic trends typical of rural areas.
On the rental side, the Federal Market Rent (FMR) of $920 for the metro area in fiscal year 2026 stands out compared to the current market rent of $725, based on Census ACS data. This discrepancy signals potential upward pressure on rental rates, aligning with federal standards and potentially reflecting future growth in the local economy or population. Landlords and investors should consider this trend when evaluating the rental income potential of their properties in the coming years.
Investors with a long-term horizon should be cautious about expecting substantial appreciation in property values. While the current market conditions support steady rents, the limited growth prospects suggest that capital gains will likely be modest. Instead, the focus should remain on stable cash flows and a consistent tenant base, leveraging the favorable rent-to-value ratio to ensure profitability.
In conclusion, the data points to a market where pricing power is maintained through stability rather than rapid appreciation. Investors should capitalize on the strong rental potential while setting realistic expectations for property value increases. The median home value and the current rent-to-FMR gap provide a solid foundation for investment decisions, emphasizing the importance of steady returns over speculative growth.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). Demographics from U.S. Census (2024).
About FMR: Fair Market Rent (FMR) is used to determine payment standards for the Section 8 Housing Choice Voucher program, initial renewal rents for some expiring project-based Section 8 contracts, and rent ceilings for HOME Investment Partnerships.