Real Estate News – April 2022
How Does Inflation Affect Home Prices? ![]() So, how does all of this affect the real estate market? The Inventory Issue First, many homeowners aren’t putting their houses on the market. This is due to factors like lockdowns, but also the fear they won’t be able to find a new home to buy. There are construction delays due to supply chain bottlenecks as well. Low inventory means buyers are often having to put in bids well above asking to get properties, creating a frustrating situation, to say the least. Other Inflationary Effects On Real Estate First, inflation is a reference to a rise in the price of everyday goods. Those everyday goods are used to build homes. If the price of things like lumber and appliances go up, then the builder will pass those additional costs onto the buyer in the form of higher prices. In some cases, however, inflation can have oppositional effects on real estate. If inflation rises, then theoretically, money should become more expensive to borrow. People borrow less of it, so there are fewer home purchases and that can lead to lower prices. Real Estate Can Protect You Against Inflation As home prices go up over time, you’re lowering the loan-to-value of your debt. You’re simultaneously increasing your equity, but your fixed-rate mortgage payments will stay the same. If you’re a real estate investor earning income from rental properties, then you’re likely going to be able to charge higher rent when inflation is up. You can adjust the rent while the mortgage stays the same. The relationship between housing and inflation can go in both directions. If you’re a buyer right now, inflation isn’t good news, but if you own a home, it can be one of the best ways to protect yourself against rising prices. |
Disaster Prep: Do You Have a Home Inventory? ![]() Last year, for instance, aside from experiencing a pandemic, the U.S declared 58 disasters which caused billions of dollars in damage, according to the Federal Emergency Management Agency (FEMA).
Being prepared will help to avoid delays in receiving an insurance payout should you someday face a disaster. Dig Out your Homeowner Insurance Policy Get to know exactly what coverage you have and how to submit a claim should the unthinkable happen. Then, create an inventory of your belongings. Many people choose an old-fashioned checklist (such as the one offered by NYCM Insurance or at Allstate.com), while others use video (narrated with the necessary information), or photographs labeled with the information that insurers require when considering a claim. Information required by insurers: Each item’s description and the quantity (ex: 2 sterling silver candlesticks) Name of the manufacturer (ex: Tiffany & Co.) Make/model/serial number The date (or estimated date) of purchase Where the item was purchased The appraised value of each item (or an estimate) If you can’t find the written appraisal for any item, jot down the name and contact information of the appraisal company and the date the items were appraised. Keep your Inventory Safe Tips from the Experts |