Doom & Bloom: Economic Impacts on Residential Real Estate

Hans Wydler

Doom & Bloom: Economic Impacts on Residential Real Estate

Last week, we attended Compass' annual conference in Atlanta. It was a great opportunity to network with the top agents across the country and compare notes. 

We also heard a presentation from Jason Schenker, a top economist and Chairman of the Futurist Institute.

Jason had a 77-slide deck on the economic state of the world and frankly, the outlook was bleak. 

Jason covered Cold War 2.0, raging global inflation, teetering emerging market economies choking on debt, trouble in Taiwan, and looming global energy and food shortages. That all being said, 5 of the 77 slides actually had some positive news for residential real estate and encouraging implications for future home values. 


Here's a quick summary:


1. Mortgage Credit Never Looked So Good (Q2 2022)

We managed to learn something during the 2008/2009 financial meltdown, and the credit worthiness of home owners is the strongest it's been, with the majority of homeowners having credit scores of 760+. Delinquencies are also near record lows. This means the chances of distressed sales tanking the market is highly unlikely.

2. The U.S. Labor Force was at an all time high in August 2022

Strong home sales are highly correlated to jobs. Strong job markets sustain real estate demand.

3. Business confidence has fallen sharply

Already plagued by tight inventory, waning builder confidence will further constrain inventory levels in the coming couple of years. Housing starts for single family homes, for example, dropped nearly 19% year over year in September according to the U.S. Census. Less supply also supports home values.

4. The Everything Selloff

Stocks, bonds, gold and crypto have all dropped in value this year. The one exception is the US Dollar. 

Global investors are looking for safe havens to park their cash, and the US dollar is still perceived to be the safest bet in town, despite 8-9% domestic inflation rate here in the U.S.
Think about it. Global cash is pouring into the US, and during periods of high inflation, folks want to invest their wealth in hard assets. If you ask me, sounds like residential real estate is a good home for your cash (see what I did there?).

In short, inflation and rising interest rates are certainly impacting the number of homes being sold, but we expect homes to be a relatively excellent store of wealth in the months and years ahead.

Recent Blog Posts

Stay up to date on the latest real estate trends.

Life Lessons from Hans' 35th Reunion

35 years is not as long as you think.

The Power of Our Network

After over 20 years of being real estate agents, we've realized that the quantity and quality of our networks is part of our "secret sauce".

Why are Realtors like Doctors?

Two reasons. First, our hours are equally bad and unpredictable. Second, hiring an average or even good doctor/Realtor is fine If everything is normal, but when you ar… Read more

"Should I stay or Should I go"?

A common question we get from homeowners who are outgrowing their current home is, “Does it make more sense to renovate/expand or buy a larger home”?

Doom & Bloom: Economic Impacts on Residential Real Estate

Inflation and rising interest rates are certainly impacting the number of homes being sold, but we expect homes to be a relatively excellent store of wealth in the mon… Read more

The Grand Canyon & Real Estate

Steve’s Rim to Rim Takeaways

Home Sales & Haircuts

It's no surprise that the last several months have seen massive change in the real estate market, driven primarily by dramatically rising interest rates. What does tha… Read more

Navigating Volatile Markets Through Long-Term Focus

Call us today and ask us, “Is now a good/bad time to buy/sell?” and you’ll get a lot of questions in return before you get an answer from our team.

Searching for the "Perfect" House

Yep. Everything you’re hearing is true. Rates are up, inventory is starting to grow, and some buyers are moving to the sidelines as “affordability” has skyrocketed.

Work With Us

Wydler Brothers have been selling residential real estate for over 20 years in the DC metro area. Along the way, they’ve achieved numerous awards and recognitions, including being recognized as “The Most Innovative Real Estate Agent in America” (Inman, 2014), written several articles for The Washington Post, authored a book, “Inside the Sell”, co-founded a real estate tech company which sold to Move, Inc. in 2013, and built Wydler Brothers into a highly respected boutique brokerage with 70 agents and employees which they sold to Compass in 2019. Currently, Wydler Brothers is among the top 3 teams in the DMV and was the #1 Compass Team in 2022.

Follow Us on Instagram