According to sources, the inflation year over year was still up 8.5% today but month to month it was at zero. What does this mean? Some sources suggest that current efforts to manage the economy are beginning to work and claim that the market is still buzzing with activity, The opposing viewpoint notes that overall useage of gasoline is down from last year and more indicative of 2020 levels that were widely deemed as depressed, indicating that people can’t afford as much. What could this mean for real estate?
Regardless of your opinion of the direction, we believe that it spells opportunity for the prepared real estate operator. With home sales sliding amidst rising interest rates, that naturally encourages more renting, even at higher rent rates. While prices are high and new home starts are softening, it also indicates that building property to rent could be a strategy worth considering. Keep in mind that people were robustly buying homes when interest rates were closer to 9% but of course, prices were lower and wages to cost were better, but lenders are likely to respond with products designed to address the gaps. 40 year mortgages are one such example. We are concerned about both rising inflation and any government reaction but we also firmly believe that a properly educated and prepared operator could do very well in these uncertain times. In the coming days, there will be more local real estate experts addressing these continuing issues on the Bargain House Network program, Real Estate News.
When considering any major purchase or financial decision, it is widely accepted that an individual should consider all variables not just one. Job growth and employment continue to be critical factors among all others to indicate the health of any given market. Well, we must add that the information provided is meant to be informative but not intended to convey financial, accounting, investment, or legal advice.