There are three big takeaways from the most recent developments in banking.
How will this new banking crisis affect real estate? This is an excellent question, and I am happy to provide my insights on the matter. Many people have been wondering about this recently, so here are three things you should consider:
1. Is your money safe? Many people are going to start wondering about where their money is being kept. Is it in a bank? A CD? The stock market? Many people would assume that their money was safe in the bank, but there are now thousands of people in New York and California who were rather suddenly disabused of that notion.
2. Will local banks go away? This has the potential to seriously harm the residential and commercial markets in northwest Ohio. We aren’t in a part of the country that hosts the four or five largest banks—the ones that are too big to fail. It would be a huge change if we could no longer use local banks and were forced into using the larger ones.
“This is a Fed crisis, not a banking one.”
3. What will happen to interest rates? There may be some unknown consequences when it comes to interest rates. Remember that, as rates have risen, you might be able to get a good return on a CD, but you paid more in interest on loans. If we lose local banks, it’s unlikely that people will seek loans out of New York City, meaning that cash will be king once again. Also, we can expect a similar return of owner financing and leasing.
The real lesson here is that even if our local credit markets and banks are destroyed, life will still go on. It tends to find a way. Plus, when viewed from a northwest Ohio perspective, this is a Fed crisis, not a banking one. It could change our entire real estate landscape, but only time will tell.
I am here to be your resource for all things real estate. If you have any questions about this topic, I will keep my eyes on things and do my best to keep you informed. For all of your real estate needs, my team and I are here to help. Feel free to reach out to us by phone call or email.
