President Joe Biden has authorized sanctions this week on Russian Officials with assets in the USA. This is coming after Russia’s invasion of Ukraine shook the global markets causing a […]
The real estate market in Florida has been thriving. There has been an increase in population growth which has of course encouraged demand for rental properties as well as luxury […]
President Joe Biden has authorized sanctions this week on Russian Officials with assets in the USA. This is coming after Russia’s invasion of Ukraine shook the global markets causing a spiral in oil and gas which have experienced volatility, with crude oil rates going from $43.00 a barrel to about $104.00 and expected to peak to $109.00 – $143.00 depending on when the crisis ends. And the global stock market, which is expected to get hit by 5% – 30% depending on Russian stocks listed.
The luxury real estate market is also feeling the impact as the US government has put sanctions in place to restrict the Russian elite’s ability to access western financial institutions. Russians in Sunny Isles, Florida have been worried that the rising conflict will blacklist them from buying properties in the USA.
“If the Ukraine crisis deepens, then there may be a negative impact on the overall economy and the real estate sector, which is currently witnessing a growth trajectory,” experts say.
The Treasury Department has proceeded to immobilize Russian Central Bank assets that are being held in America in a bid to cripple their reliance on international markets with additional measures to exclude major Russian financial institutions including big lenders VTB and Sberbank, representing more than 80% of the banking sector from the Society for Worldwide Interbank Financial Telecommunication, or SWIFT.
“If SWIFT will be taken away from them, and hopefully that happens today, that would complicate any kind of transaction,” said Natalia Raphael, a Moscow-born real estate agent with the Keyes Company. “If they cannot use wires, if they cannot transfer money freely as they have been so far, that complicates business quite a bit.”
These Sanctions are very aggressive and are making it very difficult for Russian financial institutions and the elites to trade in US dollars because the invasion of Ukraine has caused some strain in the purchase of real estate properties in South Florida.
“We are extending the reach of US sanctions to prevent the elites close to Putin from using their kids to hide assets, evade costs, and squander the resources of the Russian people,” a National security council official told the Miami Herald. “This is the new approach.”
The National Association of Home Builders have also recorded a spike in prices of construction materials because of global supply-chain disruptions as prices of construction materials have gone up to 22% annually with lumber prices up 40% over the past months.
“Higher mortgage rates will slow home buying demand over the course of 2022, and the Russia-Ukraine crisis will add short-term volatility to the bond market,” said NAHB Chief Economist Robert Dietz.
The real estate market lately has been in a bubble which is about to burst and with the unsteady global situation with Russia invading Ukraine, prices are likely to increase drastically over the coming months, which could possibly lead to a recession.
The real estate market in Florida has been thriving. There has been an increase in population growth which has of course encouraged demand for rental properties as well as luxury real estate. Mortgage interest rates are going up for the first time in a while and are expected to reach 3.60%, an increase from the current rate which is 3.30% by the end of 2022. Several housing experts have predicted where they think the real estate market is headed in 2022. Here’s what they had to say:
Danielle Hale, Realtor.com chief economist:
We expect a whirlwind 2022 for the housing market. Home sales are expected to increase another 6.6% and home prices to rise another 2.9% on top of 2021 highs. A gradual uptick in mortgage rates will make affordability a top consideration for home buyers, especially the 45 million Millennials aged 26 to 35 who are at prime first-time homebuyer age. Demand from these young households will keep the market competitive and fast-paced despite a small uptick in housing inventory as builders continue to ramp up production, increasing single-family starts by 5% in 2022.
Daryl Fairweather, chief economist for Redfin:
After two years of unprecedented uncertainty in the housing market, we’re expecting 2022 to be just as unpredictable. We expect 30-year-fixed mortgage rates to slowly rise from around 3% to around 3.6 by the end of the year, mostly attributed to the pandemic subsiding and inflation continuing to linger. By late fall, high mortgage rates, paired with already high housing prices, will likely slow annual price growth to roughly 3%.
This low price growth will likely discourage speculators from entering the market, giving first-time homebuyers a better chance at securing a home.
In 2022, we also predict home buyers will start considering climate change as a major factor in their home-buying decisions, as natural disasters and extreme weather events continue to increase in frequency. Home sellers will also likely make significant investments in climate-change resilient home features to appeal to climate-conscious home buyers.
Keith Gumbinger, vice president of mortgage information website HSH.com:
Home sales in 2022 should be solid overall, but high home prices will likely be joined by higher mortgage rates, tempering sales compared to this year. The outsized annual increases in home prices seen in 2021 should slow in 2022, but even so, will leave home prices at or near record highs. At the same time, mortgage rates will tend to be firmer as the Fed ends its bond-buying programs and begins to lift interest rates by the middle of the year. Pricier homes financed with higher mortgage rates will exacerbate affordability issues, and this can be expected to dampen demand from homebuyers on the margins of the housing market.
In general, housing affordability seems to be falling. The volume of inventory of homes for sale fell behind the demand of buyers seeking property to buy. A lot of locals are grappling with affordability as Florida has seen an influx of foreign wealthy Investors with low taxes who have been swooping in and snatching up available inventory.
“It’s not a bubble, it is about the fundamentals,” said Jenny Schuetz, a housing researcher at the Brookings Institution. “It is about supply and demand — not enough houses, and huge numbers of people wanting homes.”
The pandemic destabilized the housing market, as the job market was stalled and the supply of homes to buy has seen a drop as a result of the restrictions associated with COVID-19 as well as supply chain shortages. So buyers need to prepare ahead of time as they are entering a hot as well as one of the most profitable markets to date, it is important to research ahead of time to avoid panic buying and to stick to a reasonable budget.
“Buyers may have a little more time compared to 2021 to make a decision, but given that it will still be a seller’s market, they’ll still likely have to move fast to keep up with that market velocity, Hone in on your home buying budget so you have a firm plan of what you’re willing to spend for a property that meets your needs. Buying a home isn’t just a financial decision. It’s also a lifestyle choice. Buying a home should make sense for your personal and financial situation.”
Odeta Kushi, deputy chief economist at First American Financial Corporation advises.
How Ukraine Invasion Is Affecting The Florida Real Estate Market
UncategorizedPresident Joe Biden has authorized sanctions this week on Russian Officials with assets in the USA. This is coming after Russia’s invasion of Ukraine shook the global markets causing a […]
What’s Changing In Florida Real Estate?
UncategorizedThe real estate market in Florida has been thriving. There has been an increase in population growth which has of course encouraged demand for rental properties as well as luxury […]