War and its Impact on Real Estate
The United States will be in a major conflict with Iraq as you read this. What the impact on the Real Estate market will be is unknown, but you can almost bet that it will not improve the market, either in pricing, interest rates buyer interest, or home availability. However, there are two possibilities of interest to every home buyer or seller. One scenario is painted where the home sales drop due to buyer avoidance of the market, caused by higher interest rates. The higher interest rate would be caused by surges in capital requirements by government and industry, as well as wholesale liquidation of government bonds and these funds return to the stock market as investments in companies. There, higher interest rates would eventually slow the remaining buyers entrance into the real estate market temporarily. The other scenario can be made that the impact of the conflict will be of short duration and the need for housing will surpass the limited improvement in the overall economy. This scenario paints interest rates as basically unchanged for the short to medium term, with perhaps a slight increase as the economy improves. In the case, home prices not only are maintained, but also increase as the slight rise in interest rates actually attracts buyers to the market.
Whatever the case, if you are selling to move up, your home will adjust with the market. The long term nature of real estate investment has no real up or down impact to the home owner.
Please call if you have any questions.
 |
 |
 |
 |
 |
 |
 |
