When people think about selling their house, their first mental image of the likely buyer is someone like themselves—a person or family who often calls on a mortgage lender to help with the purchase. So, given how 2022’s mortgage interest rate hikes impact the bottom line for buyers who depend on home loans, much of the home sales picture would seem to be bleak. Even though national sales totals reinforce that conclusion, it doesn’t paint the whole picture. For some potential buyers, mortgage interest rate hikes aren’t an impediment. In fact, they may even be the opposite.

That’s the case for many in the pool of potential buyers who don’t depend on outside financing to complete a home purchase. This includes not only independently wealthy individuals but also buyers whose cash positions have greatly benefitted following the sale of their own houses. Because of the explosion in property values, a growing number of recent sellers are showing up with the ability to make all-cash offers—or offers that include only the need for a small percentage of outside financing.

But there is also another pool of potential buyers that is emerging in force: the institutional buyers. Experts at Cornell University’s Baker Program in Real Estate have been studying the data, and in conjunction with institutional analysts at Hodes Weill & Associates, have analyzed the portfolios of participants who manage assets exceeding eleven trillion dollars. The top conclusion heading this year’s list of “Key Findings:”

“1. Institutions continue to increase target allocations to real estate…”

That outlook was seconded in November’s BusinessPlus newsletter, which reported that the participants in Cornell’s study almost all held “the expectation that attractive buying opportunities will emerge over the next several years.” It’s not hard to deduce that as long as interest rates hold back some groups of potential buyers, others who don’t share that handicap will seize the opportunity to take their place (a phenomenon seen in previous eras).

History has shown that when St. Cloud home sales slow, some of the best opportunities can emerge—and organizations with the wherewithal to take advantage of their long institutional memories sometimes prosper as a result. Individuals aren’t automatically excluded as potential buyers, either. As other forms of investment (last week, it was the stock market) lose luster for risk-averse individuals, real estate’s eons-long reputation inevitably invites a second look. Call me anytime to survey the latest offerings.

Providing a superior level of informed, professional real estate services to buyers and sellers throughout Central Minnesota. We have agents specializing in residential, commercial, multifamily, new construction, existing, investment properties, foreclosures/REO, and short sales with offices located in:

Multiple Office Locations To Serve YOU!

Saint Cloud 320-259-4554

Princeton 320-983-3555

Sartell 320-259-4554

Little Falls 320-259-4554

Minneapolis 763-565-2000

Hutchinson 320-455-9127

Litchfield 320-298-1140

Premier Real Estate specializes in MANY areas around Central MN including Saint Cloud, Waite Park, Rice, Royalton, Sartell, Royalton, Little Falls, Cold Spring, Saint Joseph, Elk River, Monticello, Ramsey, Saint Michael, Andover, Ham Lake, Anoka, Champlin, Buffalo, Glencoe, Brownton, Silver Lake, Kandiyohi, Dassel, Minneapolis, Maple Grove, Saint Louis Park, Saint Paul, Robbinsdale, Crystal, New Hope, Brooklyn Center, Brainerd, Nisswa, Aitkin, Albany, Coon Rapids, Sauk Rapids and more!