Marketing Updates!

Commercial market - With interest rates hiking every day, the previous investment opportunities are no longer penciling out. On top of that, commercial lending has tightened up. This is shifting the market and causing a stalemate between buyers and sellers. Sellers don’t want to acknowledge that an investor can no longer pay the high purchase price due to the high interest rates. However, new construction has slowed with builders pulling out, which halts supply growth and therefore increases rent due to lower supply.

Residential market - The residential market is interesting because on one hand affordability is extremely low. On the other hand, new construction has slowed, just like the commercial market, and keeps the inventory “low”. Loosely speaking, if both supply and demand drop at the same pace, volume would decrease but price would stay the same. However, with affordability also being an issue, prices are likely to continue dropping as rate hikes continue. Residential real estate is also extremely location specific. People are going to buy when they have to, and where they have to, no matter what the rates and market are.

- Chase Melton