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Why a Slowing Market Can Present New Opportunities for Investors THREE FACTORS ARE KEY TO INVESTORS’ ABILITY TO CONTINUE EARNING PROFITS.
by Susan Naftulin
igh interest rates. Low inven - tory. Declining refinance activity. Increasing foreclosures. Rarely, at least in recent memory, has there been such a challenging confluence of factors creating so much uncertainty in the real estate market. Still, there are some distinct messages in the tea leaves that industry professionals can use to guide successful decision-making in the coming months. Given the lack of housing inventory and the widely agreed upon belief that H
interest rates will continue to rise, the spring market has already shown a rush of activity. Homebuyers are clamoring to beat tomorrow’s rates.
average homebuyer has a war chest. These prospective homebuyers may be more reluctant to spend considering rising gas and food prices, but the situation is a far cry from the credit crisis we saw in 2008. Housing demand will very likely remain strong. For the first time since 2007, house prices have been deemed unaffordable for most Americans. The simple fact is this: Home prices (and now interest rates) cannot continue to outgrow income or income increases.
SIGNALS FOR CONTINUING STRONG DEMAND Despite recent reports of the first quarter showing contractions, the current economy remains strong, with low unemployment rates. That means employees are being paid a premium to come to work, and the
42 | think realty magazine :: july – august 2022
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