All Forum Posts by: Andrey Rudenko

@Andrey Rudenko

Yes, life does go on. And I’m not pointing fingers or judging anyone. I just personally can’t even think about that stuff (money/investments) right now other than letting my investments coast for now as they are. I’m sorry to hear your homeland is suffering.

This response isn’t pointed at any person in particular, but is anyone else having a hard time thinking how concerned everyone is about the economy and their investments when people in Ukraine are suffering and losing loved ones?

Can't speak for others, but  as a Ukrainian, born and raised, after seeing my streets and my buildings being bombed for 3 days, I could barely focus on anything including business. That being said, life does go on. And I know for a fact, every single member of BP, and the entire globe is very concerned about lives in danger now, my phone is blowing up with messages of support from everyone. I do have to say, that unless there is anything anyone can do to help people of Ukraine, there is nothing wrong in focusing on business. There are many other wars going on right now aside from Ukraine as well. Somalia for example.

God bless everyone.

While it is still a very fluid situation, and all this will certainly change based on what happens next, here are the major affects of the Russian invasion of Ukraine on the US real estate sector so far:

1. The 30-yr. fixed-rate mortgage averaged 3.89% for the week ending Feb. 25, down three basis points from the previous week (a reversal from the trend over the past several months during which time rates have been steadily rising). 

2. The Fed is now indicating they may only increase interest rates by a quarter-point, not the predicted half-point in March, or may not increase rates at all. 

3. Mortgage rates slipping may reduce the urgency of buyers looking to buy before rates rise, perhaps slightly decreasing demand. 

4. Many investors moved into the bond market, which includes mortgage bonds, as they are generally considered safer, less volatile investments. Bond prices rose as a result. When bond prices go up, mortgage rates typically fall.

5. Disruption of Russian energy exports could increase gas prices, utility costs and cause further disruption to our supply chain driving up the cost of all types of goods. Such supply chain issues could greatly increase the cost of new home construction. 

6. The stock market, where many buyers pull money from to purchase property, tumbled earlier this week but then recovered at the end of trading on Friday. Crypto markets have been even more erratic. This market volatility may cause some buyers to sit on the sidelines until things stabilize.

7. The already accelerated rate of inflation is expected to rise even further—hurting renters, buyers, and builders who will continue to grapple with fast-rising construction costs. Home appreciation is expected to be in the double digits again this year. 

8. In the near term there may be fewer buyers with the confidence to offer way over asking price on properties this weekend (which has become the norm in most markets). Perhaps demand will lessen slightly, alleviating the extremely competitive market and providing some relief for those looking to get a property under contract/ needing to move. 

9. Sellers who were planning to list property later this year may want to consider listing now, in case there is a market shift later this year.

I am focused on what I can control, which is deal sourcing, financing, and management.  Everything else is just noise.

 But is that good or bad?

I'm picking up REOs left and right at 20-30% of peak market prices, and even properties in very good condition appear to be down 30-40% the past year or two.