Pulse Results

Pulse: Land Market Cannot Handle a Rate Hike

Pulse: Land Market Cannot Handle a Rate Hike

The May LANDTHINK Pulse revealed 73.85% of respondents believe the land market is not strong enough to sustain an increase in interest rates. With the overall economy improving, especially the labor market, the Fed has signaled that it will likely increase interest rates as early as midsummer. When the Fed acts, everyone planning on applying for a loan, those with retirement accounts, and money in the stock market will be affected.

It was the general consensus of the LANDTHINK audience that the land market is not strong enough to handle a rate increase. Those answering “NO” to our informal, online survey, likely think with an increase in rates, the real estate land market could not continue making strides since the economic downturn. The land market has stabilized since then, but a rate hike could negatively affect the land market in the long term. Temporarily it might be a good thing, luring those sitting on the fence to move forward with that land purchase they’ve been contemplating. In the long-term, affordability would be affected if an increase in interest rates were not offset by a growth of household income. High interest rates equals low demand for loans.

Those answering “YES” to the question, only 26.15%, do believe the land market is strong enough- at least in their part of the U.S. There are many determinants of the health of the land market, and markets vary in every section of the United States. This percentage of respondents most likely believe the land market will continue to rebound, provided lenders ease their loan standards for qualified buyers. Low interest rates are typically indicative of a weak economy, so an increase would mean a robust economy. Strong economic growth could make for a competitive, thriving land market.

The May Pulse posed the following question to our LANDTHINK audience: In your opinion, is the land market strong enough to sustain an increase in interest rates?

The LANDTHINK audience strongly expressed their opinion on the current state of the real estate land market. An overwhelming 73.85%, indicated a rate increase would crush a land market sill recovering from a long slump.

Here are the final results:

May 2015 LANDTHINK Pulse Results

  • 73.85% said NO
  • 26.15% said YES

Thank you to everyone who participated and shared the Pulse with friends and connections in the land industry.

LANDTHINK is seeking sponsors for the July LANDTHINK Pulse Question and months thereafter. Sponsorship of the Pulse during the busiest time of the year is a great way to ensure your brokerage is the first one buyers and sellers call when they have a need to buy or sell property. Leveraging our entire network of web and social media sites is a great way get your name out there during the buying season. Pulse sponsorships are offered on a first come first serve basis and are subject to certain limitations. If your business would be interested in sponsoring next month’s July Pulse question, please contact us soon.

Do you have a suggestion for next month’s Pulse question? Submit your question here and we might choose yours!

If the government eliminates 1031 exchanges, what impact will it have on the land market? Click here to answer the June Pulse question.

This content may not be used or reproduced in any manner whatsoever, in part or in whole, without written permission of LANDTHINK. Use of this content without permission is a violation of federal copyright law. The articles, posts, comments, opinions and information provided by LANDTHINK are for informational and research purposes only and DOES NOT substitute or coincide with the advice of an attorney, accountant, real estate broker or any other licensed real estate professional. LANDTHINK strongly advises visitors and readers to seek their own professional guidance and advice related to buying, investing in or selling real estate.

About the author

LANDTHINK

LANDTHINK is part of the LANDFLIP family of sites and brings together the various components of the land industry and provides knowledge and information to land investors, owners and professionals to create a stronger land marketplace. Get land smart!

Add Comment

Click here to post a comment

Speak Your Mind

Do you support the new tariffs placed on Canadian softwood lumber imports?

ANSWER NOW