Just the Peaks

This newsletter at a glance 

  • Russia’s invasion of Ukraine is fueling concerns in the U.S. housing market
  • Factors include stock market uncertainty, supply chain issues, and inflation
  • If you’re looking to buy in today’s crazy seller’s market, follow our lead

 

The Russia-Ukraine conflict has people wondering, should I buy? 

Hear Everest’s battle cry: the time is always right!

The turmoil taking place in Eastern Europe has the entire globe on the edge of its seat. As Putin continues to wage war on Ukraine, the effects are being felt in financial markets all across the world—including U.S. housing. 

For months, Americans have dealt with record-high home prices, record-low inventory, and the pressures of an ongoing pandemic. Toss the threat of World War III into the mix, and we’ve got a recipe for homebuying disaster. 

From bidding wars to world wars

       

For weeks, politicos and scholars have been grappling with the economic fallout from this brewing battle. While some economists have a pessimistic outlook, the broader implications of Russia’s Ukrainian invasion seem to be less worrisome. 

For one, the decline in international transactions will have minimal direct impact on the U.S. housing market. However, what we should consider are the war’s greater economic implications and subsequent changes in consumer behavior. 

     

To understand where the U.S. housing market is headed, industry leaders say it’s a good idea to pay attention to what’s happening across the pond. The impact will be different depending on a variety of factors including your source of payment. 

“The global unrest could give American consumers the jitters and prompt them to cut back on spending and economic activity,” reports Realtor Magazine. “The luxury real estate market may feel the disruption the most, as financial resources home buyers use to pay for home purchases, such as stocks and cryptocurrency, have been volatile.” 

For the average American, other concerns include: 

  • Record inflation. It’s already at a 40-year high, and Russia’s actions could escalate the problem as they fuel stock market uncertainty. 

  • Growing construction costs. Inflated prices directly affect homebuilders who are now paying 40% more for lumber and 22% for construction materials. 

  • Rising food and oil prices. Household budgets are being squeezed to the max. As the world’s second-largest oil producer, Russia has a huge hold on energy markets.

  • Supply chain disruptions. This has been an ongoing problem in the U.S. since the early months of Covid and will continue to increase construction costs. 

  • Higher mortgage rates. The glory days are over! Higher rates are already happening, further impacting housing affordability. 

For more, visit Realtor.com. 

Top takeaway? Don’t Russia decision. 

Tensions in the East don’t have a direct impact on U.S. housing, but the ripple effect could be profound. Today’s conflict between Russia and Ukraine is spawning widespread worries throughout the Western World that should be taken seriously. 

Still, hopeful homebuyers can always score a house—even in a scary economy. When taking inflation and mounting costs into account, it’s best to be flexible (and strategic) in your house hunting and purchase preparation. 

With Everest at your side, you won’t have to lower your sights! Check out these top tips for buying in an extreme seller’s market. 

6 Buying Strategies to Use in a Competitive Housing Market

Get mortgage pre-approval 

      

By verifying your finances ahead of time, sellers will instantly know you are a viable buyer. Now that homes are receiving more than 3 offers on average, having mortgage pre-approval gives you a potential advantage in the event of a bidding war. 

Start below your spending limit

       

For obvious reasons, people are attracted to homes at the top of their price range. But in a seller’s market, you have to assume someone will outbid you. To seriously compete with other buyers, a good strategy is to assume you will have to bid up. 

Give yourself extra time

      

Like we said—you can’t Russia decision in this climate! If you’re borrowing money, the process must be factored into your timeline. Reach out to your Everest family for a full rundown on how long it takes to secure funding, as this may affect your home search. 

Choose a top real estate agent

      

If your heart is set on a specific neighborhood, seek out the best agents in the area. They will have intimate knowledge of market trends and can best negotiate on your behalf. Aside from recommendations, read online reviews to weed out the bad ones. 

Be prepared for the deal to fall through

       

In a seller’s market, disappointment is the name of the game. Once you accept this reality, it’s easier to have a positive perspective. Try to avoid obsessing over a specific house. Keep your options open and avoid making a rash decision because you’re desperate.

Look beyond the list price

     

Winning a house doesn’t always depend on the amount of the offer. Sure, money matters, but there are many other aspects of your proposal that may appeal to a seller. For instance, certain contingencies or a speedy closing might land you the prize. 

Everest says: the Kremlin can’t keep us from closing