It isn’t just earthquakes that shake our world. Real estate can have a whole lot of shaking going on in many areas, and, just like an earthquake, their duration and extent of their impact aren’t always readily apparent. When you have runaway inflation, the promise of interest rate increases, and an international conflict that seems to be headed to a global level compete with the threat of nuclear arms being utilized, you are in a shaker. In Northern Nevada we are often lulled by our rural atmosphere and relative obscurity from global events, but in times like this it becomes easy to see how we are all one no matter where we live. From food, energy, economies, virus threats, war and peace, we are all interconnected one way or another. The impact will reach us in our pastoral enclave of Northern Nevada, but one must ask, to what extent? Inflation is here. You’ve seen it when you check out at the grocery store and fill the tank of your car. Home prices have been steady, not dropping or rising significantly, and the demand in Northern Nevada has not subsided. Will the increase in interest rates affect our market? Normally one would say yes, but there is so much cash flowing about these days that chances are, the market will remain steady in this regard. Global conflict can create unexpected impacts on uninvolved parties, but nevertheless, the impact can be there. Ukraine provides much of the world’s food. As that supply is interrupted, other suppliers will be tapped thus increasing the pricing due to lower supply with constant demand. That will most likely be talked about as “inflation,” prices going up. Regardless of whatever it should or will be called, the higher prices will lead to less borrowing/buying power for those needing a loan to buy their house. Fuel costs are surely to rise, and we are being told to expect it and to live with the pain. Add that increase in living/operating cost to your monthly grind and again, you have less borrowing/buying power. There are other nuances in the mix, but these are sufficient to make the point that there will be a cumulative effect on the borrowing/buying power of many buyers in the upcoming months. As enough months pass, we will be facing a mid-term election which will further add to the shaking going on. So, a lot of this is what you already suspected. What does it mean to you? Time for an assessment. If you are buying with a loan, how steady is your employment? What are the chances of your employer closing their doors or laying you off? Are you due for a raise, or can you ask for a raise to offset some of these increased costs? If the right home becomes available, are you looking at its price today or are you making a 10-year or longer plan for ownership? Are you doing a total financial analysis of your investment or are you factoring in any emotional return on your investment? Do you understand the meaning of “paralysis from analysis”? Are you missing opportunities due to this phenomenon? Are you ready to own a home? Inflation is being measured in single digits right now. Interest will go up a quarter or half a point at a time. Gas is going up by quarters on the gallon. How does it add up in your life? Will it really make a difference in your overall position or is this just a situation where it is frustrating on principle, but you are able to proceed with your home purchase without interruption? Be sure you know why you are feeling the way you do when you make your decision. Owning your home means stability, help with your taxes, being able to maintain and improve it for your own benefit, potential for appreciation, etc. If your situation is solid, then contribute to your overall stability and expend the effort to buy your home regardless of the shaking, rattling and rolling that is rocking your world right now. How far will the world leaders allow conflict to negatively impact their economies and people? How much will it affect you? When it comes to choosing professionals to assist you with your Real Estate needs… Experience is Priceless! Jim Valentine, RE/MAX Realty Affiliates, 775-781-3704. dpwtigers@hotmail.com
