Times have been tense the past week with Russia’s invasion of Ukraine. The direct impact for those in Ukraine has been devastating and ripples have been felt around the globe. I’m grateful in the United States we’ve only dealt with the lesser consequences thus far. Even still, I’ve been asked a ton recently what affect this may have on the housing market?
Overall, financial markets worldwide have been rocked with so many fearing what could come. These markets typically feel the impact first while the housing market can take a bit longer to fluctuate, if at all in this case.
What I’m Watching For
Home buyers have already felt the struggle recently with low inventory and continually growing prices so it’s only natural to be concerned that the market may be squeezed even tighter. Although nothing is certain, a few potential things to watch for include:
- Oil and Energy Prices- Higher prices will have an impact on increased spending needed for transportation, heating homes, and everyday goods that have been transported
- Supply Chain Issues- Construction materials that need to be transported may become more expensive. Logistical trade route issues with transporting supplies could occur if the crisis spreads outward to other countries.
- Consumer Apprehension- If prices rise in other areas, buyers and sellers may be more apprehensive to make any big decisions with real estate. Having dealt with and continuing to deal with rises with inflation, consumers may reach the point of throwing in the towel with real estate.
How Will It Turn Out?
I believe it’s still too early to say if we’ll see any major affects with real estate. I’m not predicting any changes in the short term and am still expecting to see prices rise as we hit spring time. Investing in assets during times of inflation and uncertainty is crucial for me when I see the power of the dollar decreasing. The level of uncertainty has increased recently but my strategy of being aggressive with investing in assets, like real estate, isn’t changing for the time being.