GREENFIELD, Iowa — The storms Iowa’s faced this year have damaged and destroyed homes.
According to a statewide housing analyst, in parts of Iowa with severe storm damage, this will impact the housing market.
Iowa Realtors Association’s Les Sulgrove tells Local 5 that a loss of inventory from storm damage is going to be what drives that market shift.
“Even though inventory is rising across the state, when you take 150 homes out of Greenfield or 300 and some homes up out of Spencer, that definitely affects the marketplace," he said.
Sulgrove said due to the nature of supply and demand, storm-impacted areas will see home pricing go up.
“When you have less supply and now you automatically have more demand, that’s going to push some pricing a little higher," he said.
Sulgrove said the prices will rise whether the property itself sustained damage or not. He adds though, it won't be a significant jump.
However, for home-renters impacted by storm damage, it’s a different story. Sulgrove expects they will see a notable jump in rent.
That’s for multiple reasons.
Investors may increase rent to cover the costs of damage, Sulgrove said, or an investor could choose to not rebuild, making up for the smaller inventory with higher rent.
In other words, whether or not your rental home was damaged, you could still see a big rent increase if your landlord is making up for lost costs at other properties.
If you rent a home that was not damaged and the investor is not dealing with any other properties that were damaged, Sulgrove says whether or not your rent increase will mirror the big jump of storm-damaged rentals or the small increase homebuyers will be looking at depends on your landlord.
Sulgrove predicts that, for financial reasons, some renters and homeowners will choose to move. Sometimes moving is cheaper than dealing with storm damage and renters will be looking for more affordable options.
He does, however, believe that some of those people will move back to the area.
"That's where their roots are and that's where they want to come back to," Sulgrove said.
He believes that, of the people moving back, homebuyers will be first because that market will bounce back faster than the home rental market.
Sulgrove believes the market will start to get back to normal in a year or two but it’s too early to say where the finish line is.