Properties are significant investments and can be greatly impacted by changing trends. With that in mind, Othman el Ballouti provides insights.
For many people, owning a home is a dream come true. Many folks also own other properties, including commercial and vacation properties. Owning valuable assets can generate a lot of benefits but also a lot of risks. With that in mind, real estate expert Othman el Ballouti shares some insights
“The world continues to change quickly, and that can have a big impact on property owners,” says Othman el Ballouti. “Property is both an asset and a burden. While owning property can build wealth, it can also create some headaches. Owners must watch for changing weather patterns, government policies, etc.”
Let’s consider a simple example of a trend impacting properties. For a long time, many people in colder climates skipped air conditioning. The need for air conditioning in Michigan is typically much less pressing than the need for air conditioning than, say, in Florida. Yet global warming is resulting in warmer weather and especially hot summers, even in traditionally cooler areas like Michigan, Minnesota, Maine, and elsewhere. The result? More people in northern areas now want access to air conditioning.
In the past, radiant heating systems using water in hot pipes were quite popular in warmer climates. These systems don’t easily support air conditioning systems, however. Owing to climate change, if you’re building a new home or are looking to remodel a property extensively, you’ll want to consider air conditioning systems even if you live in a traditionally cooler climate. This might mean using central air instead of a radiant heating system or installing a central air system alongside a radiant heating system.
“Weather patterns change over time, and this can have a big impact on living conditions and properties,” says Othman el Ballouti. “This is true regardless of human-caused climate change. Even if you’re a bit of a skeptic regarding global climate change, you shouldn’t write off weather patterns changing locally as they do change with time, and they will impact your properties.”
Temperature isn’t the only weather-related factor to consider either. Many other factors can impact commercial and residential properties. Homeowners must also consider potential flooding, wildfires, and other threats.
“Wildfires are now more common in many regions, and as climates warm, vegetation will be at risk of drying out,” argues Othman el Ballouti. “Dry vegetation is the perfect kindling for fires. Likewise, longer summers may mean more bugs and other pests. This could result in termite problems and other issues.”
Outside of climate, government policies should also be watched closely. Property markets have been quite hot in recent years; however, rising interest rates could result in a cooling market.
“When the government sets high-interest rates, loans, including mortgages, become more expensive,” notes Othman el Ballouti. “Rising prices tamp down on demand, so as mortgages become more expensive, the real estate market will cool off.”
Othman el Ballouti also urges people to pay attention to taxes. Property taxes often rise as properties become more valuable, putting pressure on property owners.