This morning, I asked Google what the war’s effects will be on the housing market. Google wasn't encouraging. Here’s what it came up with:
1) “Higher mortgage rates,” we’ve seen the interest rates reverse their declining trend recently, which will effect affordability, demand and possibly pricing later in the year
2) “Slowdown in activity,” some buyers will be hesitant due to the political and economic instability. Again, this can effect demand and ultimately pricing
3) “Rising construction costs,” I had not even considered this one, but of course with the rising prices of oil everything else will go up including construction costs. So, you guessed it, demand and pricing may be effected
4) “Reduced consumer confidence,” this one is like a subset of #2. It can only lead to a slowdown of buying activity and again pricing
On the bright side, taking a historical perspective wars do not lead to a crash in housing prices according to Google. Then again, we’ve never had a war quite like this one where 20% of the world’s oil supply is being held hostage. What Google didn’t mention, and I find most concerning is that the stock market has dropped significantly. Remember Pam Bondi’s infamous quote, “The Dow is over 50,000 right now,” that’s what she claimed we should be talking about instead of the Trump-Epstein files. The Dow closed on Friday 3/13 at 46,558 which was over 7% down from the high on February 8th. So, is it okay to talk about the Trump-Epstein files now that we are solidly under 50,000 Ms. Bondi?
7% in five weeks is a massive drop, more than 1% per week. That means most people who had their money in the stock market and were counting on it to make down payments now have significantly less. The stock market is a common source of funds for down payments. Again, demand and pricing will likely be effected if there is not some kind of political/economic miracle coming out of the next news cycle. I'm not holding my breath.
Some people may think I’m stepping out of my lane here, but I think starting a war with Iran was a grave mistake and I’m not afraid to say it. But hey, this is my blog. I have done this long enough to know when you say something controversial you will hear about it. Taking this stance may my effect my own business with potential clients who believe this war was a good idea, and I accept any consequences for speaking out.
Here’s the thing, I didn’t even touch on the effects this war is having on humanity. The three million+ people displaced, a number that will continue to rise. The horrific bombing of oil facilities around Tehran, posing serious health risks to nearly 10 million people. The innocent civilians who have been injured and killed. All the countries in the Middle East that Iran is lashing out at, and the countries around the world who are being held hostage by the closing of the Strait of Hormuz, triggering a global energy crisis. Not only is this a humanitarian disaster in the Middle East, it’s an economic nuclear blast that’s being felt around the world. And now we've got active terror cells in the US, and lone wolf terrorists are already striking out.
You may think this war was about stopping Iran’s nuclear capabilities. It’s a free country, that’s your right and freedom of speech is part of what makes this country great. Personally, I think Trump started this war to deflect from the Trump-Epstein files. I think Trump overstated the nuclear threat, and a diplomatic solution was close: the US and Iran were in active negotiations when Trump decided to let loose with the bombs. Trump thought this would be a quick ‘excursion’, not unlike Venezuela earlier this year. Depose the government, cease oil rights, and come out a winner. Iran isn’t Venezuela, and Trump has badly underestimated the situation to the detriment of humanity.