Real Estate Market Shift

Real Estate Market Shift

Overwhelming news is all over the media saying that the real estate market is collapsing. Articles from various sources state that “The Housing Market Bubble Just Popped”, “Buyer Cancellations Surge & Housing Affordability Declines Further”, “Housing affordability drops”, and all that.

According to an article from Redfin, the share of sale agreements on existing homes canceled in June was just under 15% of all homes that went under contract. That is the highest share since early 2020, when homebuying paused immediately, albeit briefly. Cancelations were at about 11% one year ago.

Furthermore, CNBC quoted Mortgage News Daily that the average rate on the 30-year fixed mortgage started this year at around 3% and then began rising steadily. It briefly shot above 6% in mid-June before settling in a narrow range around 5.75% now.

These are in fact true, the reasons for the slowdown are higher mortgage rates and surging inflation. These are causing many potential homebuyers to reconsider buying.

So, what’s in it for CORI LLC?

For Central Ohio Real Estate Investment LLC, it is a period that we can take benefit from. The reason is, that as this scenario plays out everything will go on sale and get cheaper.  Our buying model is the only thing that has changed. instead of 12 months to 24-month investments. We are at 36-month to 72-month investments.  This strategy ensures that our money partners and Central Ohio Real Estate Investment LLC have a performing asset.

Yes, properties won’t sell for as much or as quickly but that doesn’t matter at Central Ohio Real Estate Investment LLC due to the fact that our buying model in 2022 is don’t buy anything the company isn’t willing to hold for 36 to 72 months and all in on any deal no more than 80% of the area after repair value. Any smart investor changes their buying model with the market.

So, as mortgage rates rise, the effect on us, the real estate investors, can be positive. The market for rental properties will increase because lesser individuals can be eligible for mortgages. with that being said, rising interest rates reduce prices, so it can sometimes be better to invest during a rising interest rate environment.

Moreover, as interest rates rise, fewer real estate transactions will take place since lending standards will be tighter. Thus, more people will need rental properties until they can afford a mortgage. A slight increase in interest for an investor can turn into a windfall of profit in the right housing market.

Connect with us. CORI LLC will assist you in this Real Estate Market Shift.

Article sources:

https://www.redfin.com/news/home-purchases-fall-through-2022/

https://www.investopedia.com/articles/mortgages-real-estate/08/interest-rates-affect-property-values.asp

https://www.investopedia.com/financial-advisor/explaining-rising-interest-rates-and-real-estate-clients/

https://www.fanniemae.com/research-and-insights/forecast/housing-feels-stress-rising-mortgage-rates-inflation-weighs-consumer-spending

https://www.cnbc.com/2022/07/11/homebuyers-are-canceling-deals-at-highest-rate-since-start-of-covid.html?fbclid=IwAR2H-OW61Aox91TvucsF7GDdSUtWz0Z1Ol8s3KibAZjV0B2dXNCGC2QvLbs

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