Our scorching real estate market has homeowners asking, “Should I sell?” and home shoppers asking “Should I buy? Or should I sit tight and wait it out?”
The “it,” of course, is market uncertainty and swollen prices like we haven’t seen before. Tony Veldkamp, senior advisor with SVN Commercial Advisory Group and the president of the Realtor Association of Sarasota and Manatee, shares his expertise on what we might expect this summer and beyond.
How do you think the real estate market will fare this summer? Do you expect current prices to calm or continue upward?
“We’ve been anticipating some leveling off in 2022 due to many factors. First, the level of price increases that we’ve seen over the past two years is simply not sustainable. With interest rates increasing, home prices increasing and inflation on other consumer items creating less buying power for potential home purchasers, the amount of demand and price increases have to begin tapering off at some point.
“However, if the Federal Reserve System allows interest rates to stay low due to the [market] uncertainty and concerns overseas, and buyers continue to flock to Florida to purchase new residences, that leveling off could push out to 2023.”
Is the Russian war in Ukraine affecting the local real estate market?
“The tragic events in Ukraine will affect our local real estate market directly and indirectly—directly because local communities within our market, such as North Port, have a high Ukrainian population. When the U.S. accepts Ukrainian refugees, they’ll want to move to areas with friends and families, just like immigrants have done for hundreds of years. That will increase demand for housing in those markets even further, causing continued increases in pricing.
“Indirectly, the conflict has raised gas prices and the cost of other consumer items, which will remove some buyers from the market. But again, it depends on how interest rates are affected by federal policy. That will also determine if more buyers will enter the market, or if they leave the market.”
Are rising interest rates and inflation slowing down would-be home buyers?
“Absolutely. At a 3.5 percent interest rate, $2,000 a month will buy you a $445,000 house. At a 4.5-percent interest rate, you can only afford a $394,000 home still having the same payment. Also, a higher cost of living reduces someone’s buying power since more income is now going to food, gas, car payments, etc.”
Is it a good time to buy an investment property?
“It’s always a good time to buy an investment property. But you have to be careful and buy it right. The common theory is that you make money in real …….