I had the opportunity to see Dr. Yun in Des Moines recently and here is the summary of his talk. 

Top Economist Dr. Yun discusses Residential and Commercial Markets in Iowa

posted by Mark Gavin | Jul 31, 2014

Dr. Lawrence Yun, the Chief Economist of the National Association of REALTORS, presented to over 100 REALTORS in West Des Moines on July 31.

Dr. Yun covered a wide range of topics relating to the economy and housing trends. Dr. Yun discussed the pent-up demand for housing due to population growth and job growth. In some of Iowa’s biggest cities like Des Moines, Davenport and Cedar Rapids, the job growth is increasing and higher than last year’s numbers. 

Many of the cities in Iowa are in need of more inventory.  The recent sluggish recovery in housing starts can be attributed to cost of construction rising faster than the consumer price index (CPI) and the shortage in skilled construction workers. In addition, construction loans are more difficult for smaller builders due to financial regulations.  Iowans can expect growth in housing starts as inventory of more homes come to the market.

While young adult homeownership rates are declining throughout the country, Des Moines was highlighted as a top 10 market for young people to buy a home.

What Buyers Want Most from Agent

With the popularity of searching for homes on the national, regional and local firms’ websites, a person might think that REALTORS are not needed to find the right home. However, in a recent study by NAR’s Research team titled What Buyers Want Most From Their Agent, 53% of home buyers want help finding the right home to purchase.

See the entire presentation from Dr. Yun’s Residential Trends and Forecast session.

In the afternoon session, Dr. Yun discussed the outlook of commercial real estate. Commercial markets are improving slowly. Transactions including larger more expensive properties of $2.5 million are rising at a faster rate. The less expensive properties are improving at a much slower rate due to some financing difficulties with the smaller regional and local banks.

Jobs in professional business and financial services are at a new peak.  Overall job growth in improving in Iowa, however jobs in retail trade are still below their previous peak from 2001.

Dr. Yun is forecasting a GDP Growth near 3%, continued job growth. In the commercial sector he called for an increase in occupancy rates and falling vacancy rates. Overall the outlook is positive with improving business opportunities.