With the crypto crash, there’s a lot of fingers taking the pulse of another hot (and perhaps inflated) market: real estate. Today on The Dales Report, don’t miss out on this interview with our guest, Todd Slater. Slater is the President and CEO of The Simple Investor, a company operating in the real estate space, and we’re thrilled to welcome him back to the show to talk about the health of real estate all across the North American market.
Here’s some of the highlights from the interview.
Everyone’s Talking About Interest Rates, But There’s Still Value In Brick And Mortar
It’s no real surprise that interest rates are top of mind, given that inflation is soaring and the Bank of Canada and the Feds have finally stopped pretending we can avoid raising rates. Interest rates are putting upward pressure on people, but Slater believes there’s still value in the overall market. Especially if you take the crazy runaway markets like Toronto and Vancouver out of the equation.
The US Fed, however, has raised interest rates three quarters of a point. It’s the biggest increase in 30 years, and Slater believes they’re sending a message to their own economy. The wrong message, perhaps. Will people endure it? Slater doesn’t think so; he believes there will be some push back and we’ll see some corrections the other way.
COVID Brought “The Great Pause” To Real Estate – But It Was A Great Time To Realize The Value Of A Home, Says Slater
Housing prices looking lower than normal over COVID, Slater believes, is because most people at the upper end of the income spectrum were sheltering in place and not selling unless they absolutely had to. The only homes moving? Lower priced ones.
A full year is required to see the real deep-sea changes in effect. In February 2022, Slater says they’ve seen the greatest increase in property prices in one month that they’ve ever seen: as much as 15 to 20%. While the prices are sinking again a little bit, Slater says that the value of January or even last year wasn’t wiped out; only February, which he acknowledges was out of control.
But COVID has brought what Slater believes is a life-shift to people. Many of those who did enter into the markets were able to get their dream home, and attain what they’ve wanted in a house during COVID. Slater doesn’t believe that people are going to want to revert, downsizing and returning to the city, when they’ve achieved a better balance of life.
Real Estate’s Rental Markets, Slater Predicts, Will Get Stronger
With the number of immigrants coming to the United States and Canada, Slater says we cannot build fast enough to keep up with the demand. So where are people going to live? They’ll likely be renting, as many people would while developing credit and work history.
But the ‘silver tsunami’ is about to crest. In 3 years, 35% of all residents will be over the age of 60. It’s a huge number, and Slater says it’s not just North America; China is having this problem too. Where will they shift, and are they going to sell their primary residence, or will they be passing it down to the next generation like a transfer of wealth? Slater believes that the answer might actually be using the residence for rent.
Don’t miss out on listening to the full interview in the podcast above, because the two tackle Florida and whether the state is coming into its own, and more. Do you think the interest rates are coming on too strong, or is this sorely overdue? Feel free to jump over to YouTube to share your thoughts and comments.
To view our previous Trade To Black Podcast, click here.