Here’s why I don’t think Suze Orman’s market outlook is quite accurate.
A few weeks ago, Suze Orman wrote an article about why you should wait until later in the year to buy real estate. It was based on the fact that she believed interest rates will remain low and there will be a rise in foreclosures because of the disappearance of mortgage forbearance and unemployment benefits.
All markets are local and all real estate is local. In Iowa, it takes at least six months for a mortgage foreclosure to happen. When you add that to the forbearance that homeowners have received, it’s going to be a while before we start to see those foreclosures here.
At the same time, I don’t think her prognosis takes into account who’s working and who’s not working, as well as what the market data suggests on our housing product.
When you look at the breakdown of who is receiving unemployment benefits, a lot are service industry folks who are more likely to be renters. In our market, white collar workers are mostly still employed. The construction industry is booming here in town as well.
If we see anything at all, we will see those homeowners who are in the service industry choosing to let their properties go into foreclosure. Suze also said was that people wanted to move from a more high-density living product to the suburbs or the country so they have more distance between themselves and their neighbors.
However, the actual data from Zillow shows that there is an increase in the number of people who are searching for higher-density downtown locations. We are short on low-income housing in our market, so the less expensive products are those condos and townhomes.
We’ve had a little over 415 new listings in the last seven days, with 603 going under contract and 478 closing. You can see the velocity of how many buyers are out there. If the market does change, it’s going to take a while for these buyers to absorb the supply. Demand is always going to drive our market’s activity, but for this year, I still foresee a very strong appreciation rate for homeowners here in Des Moines.
If you have any questions for me, don’t hesitate to reach out via phone or email. I look forward to hearing from you.