Real Estate Update: A Conversation with HAAR on Inflation and Interest Rates

We’ve all been watching as inflation has risen, with interest rates growing alongside. To better understand what this means for the Huntsville real estate market, the Huntsville Business Journal sat down with Chris Hulser, the incoming President-Elect of the Huntsville Area Association of Realtors (HAAR). A realtor since 2008, Husler will be assuming the Presidency in January 2023. 

“Interest rates are tied to inflation,” explained Hulser. “As inflation goes up, the interest rates rise. This tends to slow the market a bit. Some of that is because of people being a bit more hesitant to buy. Some buyers no longer qualify, because as the interest rate rises, their income-to-debt ratio changes. It also affects the pricing of homes – we’ve seen some prices come down a little bit.” 

Hulser stressed that this was no reason for alarm.

“It’s a part of the normalization process, a trend that was bound to happen.” 

He confirmed this reporter’s long-held perspective that the particular nature of Huntsville as a hub for Federal and Defense spending provides some degree of “insulation” from the worst effects of economic downturn. 

“With the Fortune 500 companies and the Army here, it keeps demand up. A lot of people who come to work on a temporary basis end up making Hunsville their long-term home, so we’re still seeing a lot of demand. On the good side of that, we’re starting to see a lot of homes come onto the market, so while in the past, we saw buyers scrambling to find a house, it’s now easier, with the slowdown, to match buyers with houses. It isn’t that crazy, inflation of prices. Where other places in the country, their inventory is becoming stagnant, with few people looking to buy, we’re not seeing that here in Huntsville.” 

With the natural high demand for housing in Huntsville, Mr. Hulser had a word of advice for realtors looking to educate clients on what interest rates mean for those looking to buy: “The saying is, ‘you want to marry the house, but date the rate,’” he said. “Some buyers will want to wait for the rates to come back down, but we are still seeing those prices continue to rise, even if it’s more gradual. So someone could try to wait it out, but then end up paying more for a house, instead of buying now, then, when interest rates begin to go back down in maybe six months to a year, just refinance.” 

As the President-Elect of the HAAR, Hulser sees communicating with, and educating, clients about the real estate market as one of the key functions of a realtor.

“It’s important for clients to know that they need to speak to their lender, to keep in touch with them over the process, so they know the rates and whether or not they will continue to qualify if rates change. We’re looking to educate the public and stabilize the market, so they don’t panic when they see fear-tactic headlines like ‘The Real Estate Market is Dead!’”

This seems like a good place to mention that we here at the Huntsville Business Journal are committed to the principle of responsible journalism, not only as a business model, but as a service to the general public. Real Estate Update exists to keep the public apprised of developments in the market, so that those in the business of buying and selling properties might make informed decisions. Those developments may be positive, or they may be negative, but we will always strive to report on them in a calm, reasonable fashion. Sensationalist hysterics have no place in our newsroom. 

“The housing market is not dead,” asserted Hulser. “It’s adjusting, it’s normalizing, it’s doing what it’s meant to do. We couldn’t sustain the market that we had in 2021. We didn’t have any inventory, prices were going through the roof, and housing affordability was basically non-existent. That sort of price increase was never going to be able to last.” 

Finally, Mr. Hulser had a word of advice for anyone looking to buy or sell a home: “Hire a realtor. We’re the experts. This is what we’re trained to do. Trying to do it on your own would be like trying to do your own dental work.” 

According to statistics from the National Association of Realtors, the median agent-assisted property sold for $318,000 in 2021, while the median For-Sale-By-Owner-Only property sold for only $260,000. 

“We use accountants for our taxes, and we use lawyers when we have legal trouble. Realtors are professionals; we do this every day, and we know the pitfalls and the roadblocks that can come that the general public just doesn’t understand. Hire a realtor, and let us do the heavy lifting.” 

In short, don’t panic, consult the professionals, and recognize when the market is undergoing natural processes of correction. All good advice from the incoming President-Elect of the HAAR. As always, the Huntsville Business Journal will continue to keep our readers informed of market developments.

For more information on housing statistics, please visit haar.realtor