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Condo sales are falling at the fastest pace in 14 years.
Rising interest rates and turmoil in local banks have contributed to the sharp drop in demand. wall street journal reportCiting data from the company’s CoStar Group, the outlet reported $14 billion worth of apartment purchases in the first quarter of 2023, down 74% from the same period last year and down 77%. Since 2009.
Rentals and homebuying hit record highs In 2021, the housing market will begin to cool in 2022 and has continued to decline since the beginning of the year despite a slight increase in buyer interest following a slight drop in mortgage rates. Still, rising interest rates have made it less attractive to invest in real estate, as buildings are more expensive to finance than they were a year or two ago.
“No one wants to lose money when they don’t have to,” said Graham Sowden, chief investment officer at real estate investment firm RREAF Holdings. wall street journal.
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Sowden told the outlet that his firm has pivoted to other real estate investments, such as recreational vehicle parks, but buyers and sellers are skeptical that condos are truly worth it in the market now and in the near future. It remains ambiguous as to whether there is
But while investors hold back on buying apartments, one group may benefit. it’s the renter.
With less demand and purchases, landlords are less likely to raise rents for tenants. It’s a phenomenon that swept through American cities following the housing boom during and immediately after the pandemic. Nationwide rents rose 2.6% year-on-year in March, but the rate of increase in rents is much slower than the pandemic highs. Apartment list report.
“This month saw the lowest year-over-year growth rate since April 2021, representing a return to levels of rent growth that had been normal in the years leading up to the pandemic,” the report said. says.
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