Claire Northfield on LinkedIn: In the realm of social media and digital influence, I stand out as a… (2024)

Interview 3 Continued:Claire Northfield:That definitely all makes sense. I have just one last question for you, probably your favorite since you’re an economics major. Can you provide an overview of the past and current economic state?Unknown Speaker:Current economic state, let me stand for this, is in SHAMBLES! So, the current economic state is in absolute shambles, here's the thing. People will feed you the information you want to hear. We have the lowest unemployment, but we have the largest wealth disparity. We're talking about this in my class right now, human development is not mutually exclusive with wages that are increasing simultaneously. Everyone increases wages, and everyone is still unhappy, inflation still makes it ineffective. There was an increase of 8 percent during covid, wages didnt match, everyone got f*ck*d. Autonomous spending is what you need, food, utility, you have to pay for it. You need water, clothes etc…People are snatching up cheap properties and land, food control takes over the world and creates a crisis. There is spending money involved where oil is involved. When you control food and oil, the world is controlled. Pretty much, what else, there's just so much. Getting a good job is damn near impossible, because supply is so heavy and competitive, so youre gonna wind up doing some bullsh*t with your life. A few days ago I read an article about the tri state area jobs. Accounting is a perfect example, it was a safe way to go and you'd made a good amount of money, and now, they're making 40k a year, that's not liveable in today's world. You’re gonna be fighting for your life daily cause you're not making enough to be happy and it's gonna be a constant struggle. People can’t afford family expenses. Um.. what else to the economic state. We cannot even support our own troops. There was an estimated 20 million to end homelessness for veterans, people who fought for our freedom, most of them wind up on the street. They have PTSD, drug or alcohol addiction, and we can't even fund those people. Where does the money go? Places like Israel, Ukraine, not our own people. We send billions upon billions overseas, no book keeping, no checks and balances, no one will suffer. People at the top don't have repercussions, if anyone says anything, they'll disappear. People think we have a systematic process, but in reality, we don't. Claire Northfield:Wow. Definitely got everything you’ve said. That concludes my interview with you today, I appreciate you taking the time to do this.

Interview 3 Continued:Claire Northfield:Somewhat.Unknown Speaker:It's when you go to a poor area and you build something really nice and it raises the median value of everything around. You raise the median value and you increase taxes on properties. Where once paying 10k, youre now paying 12k in property taxes after an annual assessment. CMA estimates what a house is worth. If you see it's worth 1 mil, it's not worth 1 mil, it's worth what the market says it’s worth. If your neighbor's house is a million dollars, and your other neighbor's house is 2 million, the average will be 1.5 based on the vicinity you're in. How big is the house, how many bedrooms and bathrooms, does it have a pool? So they'll do imperative market balances, the market is gonna say your house is around 1 million dollars, but now we're gonna see what it really has to offer. What materials, land estimate, property estimate? For instance New York in the Upper East Side, 20 million will be the same as a house in a different location, but the price is driven by location. So overall we consider falling interest rates, wages increasing, average wage increasing, and median wages. Typically high earners get more because the wealth gap grows yearly. People step up their property game portfolio in high earners cuz those are people that can quickly afford those properties. This is a general right, tax lead sales too.Claire:Perfect. Do you think Short Term Rentals have a significant impact on reducing the availability of housing for long-term residents in certain areas? Unknown Speaker:100 percent. 110 percent. It's the sole reason it's so difficult for normal living, why do you think it's banned in so many places? Big places can buy these houses when it's so expensive, and it's gonna wind down. Everyone doing airbnb and all these asshol*s doing airbnb, so that's gonna decrease availability when you want to live somewhere. If you go to the shore, it's not allowed there either. To have shore rental by the ocean is painstaking. I know a guy who wound up with a 3 year headache and a loss. He was reported to the township and had to pay all these fines, a painstaking process. They know people are doing this, they wanna avoid it. You're gonna wanna vacation on the shore usually, and the next best thing is the east coast because it's cheaper, I'm familiar with east not west. They'll make it as difficult as possible because they know people are coming here. The constant in and out, the security issue. All these people are paying for security, and now the constant in and out throws that off you don't know who these people are. They can destroy, be a danger, vacation at the shore could also be involving drugs or alcohol, Airbnb is an interesting business because you always have to find someone liable for an issue at hand.

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Interview 3 (Realtor/Economics Major Perspective):Claire Northfield:Let’s get right into it, the first question I have is what are some of the key factors that could potentially trigger a downturn in the real estate market?Unknown Speaker:Increased interest rates, federal reserve interest rates. When it goes up, it's more expensive to borrow money which means people aren't borrowing as much. If you're borrowing at 2 percent for a million dollars, you're borrowing at $20,000. You have principal payment and interest payment. So that's one. The cost of materials going up increases housing expenses, obviously if this isn't linear with wage increases like inflation or lumber shortages, they go down, and it becomes more expensive to build a house. Increasing the costs of building then buying will slow down as well. There are multiple factors you have to look at. This is for the general market right? Claire NorthfiledYes. Can you tell me about the driving forces that could lead to an upturn in the real estate market? Unknown Speaker:So increased sales? The complete opposite of what I just said. Interest rates going down through a recession makes them fall rapidly. The federal reserve motivates spending to keep the nation alive. Our market stays alive by consumers spending. When people don't buy goods, companies fail. Renters who are employees won't make money. The lack of eviction was prevalent during Covid. During Covid they didn't need to leave even with failure of payment because they couldn't legally be removed. People therefore weren't incentivised to pay their rent. You asked what creates an upturn, so yea, so during recession the federal reserve will drop interest rates. 1.8 percent was like free money. I use that term loosely. That’s the lowest we've deemed since the housing market crashes. This fuels consumer spending which is the only thing keeping the market alive. Christmas spending was reported the highest when stimulus checks went out and people weren’t paying their rent without eviction. That led to extra money to spend on bullsh*t which fuels the market. This is good in an economic sense but there’s always a loser and winner. Landlords are the losers in this case since they weren't getting paid by tenants and they couldn’t pay their mortgages. There's stuff like, there's like very specific to the area, like in New York, are you familiar with gentrification?

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Interview 2 Continued:Claire Northfield:Okay. Perfect. Next question is the last one. Can you provide an overview of the past and current economic state or you could just do the current economic state? Unknown Speaker:Well, the past economics I mean, it was only a year ago that we declared the pandemic over, wasn't it like May or June of last year? Claire Northfield:Yeah, I think so. Unknown Speaker:Okay, so little, little over a year now or say a year and a half. It's November so a year and a half ago, it was declared that the pandemic was over. Like it's back to normal. But due to the pandemic, it caused a lot of people to go buy homes because they wanted to get away from all the clutter, clustered living and wanted to have backyards, places to breathe fresh air. And so it caused the housing increase and also because the government basically gave free money, free loans. You know, a lot of people went and invested that money in real estate. Now that money has dried up and now those programs have ended. So no more free money. The free money caused a lot of people to go buy houses, impacting supply because there was a lot of demand and less supply so the prices went up crazy. Now, those programs have stopped. The government is no longer printing money. And interest rates now are so much higher that it isn't impacting demand the other way around. And now we have many investors dumping their properties that's more supply. It's a pure economics play when you have more supply, less demand, prices go down. You have more demand, less supply, prices go up. That's what happened years ago. And that's the reverse that’s happening. Claire Northfield:That was all really good. Okay. Thank you so much. I appreciate it. Unknown Interviewer:I'm glad.

Interview 2 Continued:Claire Northfield:Perfect. Okay, next question. Can you tell me about the driving forces that could lead to an upturn in the real estate market? So basically the opposite?Unknown Speaker:Yeah. If interest rates come down to 5%, to about 5%, there will be improvements in the tax laws. In other words a few years ago, they limited the deductions people can take when they own a home like the US to be able to deduct all the real estate taxes as well as the all the interest and now they have limited that a few years ago to get $10,000 on real estate tax deduction and they limited the interest deduction if it's your primary home, mortgage, the interest paid on a mortgages up to $750,000. So if they reduce that, it would motivate people to even buy larger homes, borrow money, refinance, all of that stuff. Claire Northfield:Okay. Next question. Do you think short term rentals have a significant impact on reducing the availability of housing for long term residents in certain areas? Unknown Speaker:YesClaire Northfield:Can you expand on that? Like why?Unknown Speaker:Why? Because investors will buy them. Not homeowners, homeowners meaning people that will live in a home. Investors were buying to get a return. And people renting them are transient. They're there for a weekend or there for a week. They're there for a month. So their interest in establishing roots, having family, friends, and being conscious of what they're doing. Big parties are impacting the quality of life for the home. Owners or the residents could change the dynamics of that area. And it also investors usually are cash investors, not emotional. So the real homeowner or what I call in the business end user the real end user does not have a chance because typically, they need to go get a mortgage. There's emotions, there's questions about quality of life in that neighborhood. So they get priced out of the market. Now with the changed zoning rules regarding short term rentals, what you might find and I think that's what we're gonna see here in many parts of South Florida. Some investors will be dumping these houses and I've seen it now. So that could impact the supply and demand.

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Interview 2 (Realtor Perspective):Claire Northfield:Okay. So the first question, tell me about the key factors that could potentially trigger a downturn in the real estate market. Unknown Speaker:Right now we're seeing high interest rates as compared to a year and a half ago or two years ago. We were looking at 4% and now we're looking at 8%. So basically most people right now, mortgage homes get a mortgage to buy their homes. The cost has gotten much much higher to hold that home. So many buyers have buying power, which is the ability of how much they can borrow against how much we're making. So their buying power has come down tremendously. Claire Northfield:Ok. Anything else?Unknown Speaker:Yeah, of course, of course, the job market. We haven't heard of major layoffs. But there are layoffs that are happening. It's just nobody's talking about them. But if people are not making money, they're not gonna get a mortgage or they're gonna be worried they're gonna stay where they are. So no income, higher prices, higher interest rates will cause the housing market to suffer.

Interview 1 Continued:Claire Northfield:Lastly, let's discuss the impact of Short Term Rentals, specifically Airbnb, on the availability of housing for long-term residents in different areas. Do you believe Airbnb significantly reduces housing availability?Unknown Speaker:Well, it's a bit of a maybe. The impact of Airbnb on housing availability is a multifaceted issue, and it's not a one-size-fits-all scenario. It depends on various factors, including the specific location and the unique housing demands of the area.In places like New York City, where the population density is high, there's a greater demand for housing due to the concentration of businesses, employment opportunities, and the desire to minimize long commutes. In this context, Airbnb can potentially have a more significant impact on reducing housing availability for long-term residents. The reason is that short-term rentals, like those offered on platforms such as Airbnb, can take housing units off the market, especially in areas where demand for temporary accommodations is consistently high. Some hosts on Airbnb may find it more efficient to offer their properties as short-term rentals rather than renting them out to long-term tenants. This can lead to a reduction in available housing for those seeking a more permanent situation. It’s important to understand that the extent of Airbnb's impact varies widely from one area to another. In rural or less densely populated regions, the effect of Airbnb on long-term housing may not be so there since the housing demands are different.Claire Northfield:In that case it’s safe to say that the effect of Airbnb on housing availability is influenced by the local context, with more urban areas potentially feeling a more significant impact?Unknown Speaker:You got it.

Interview 1 Continued: Claire Northfield:Let's now explore the driving forces that can lead to an upturn in the real estate market. Can you shed some light on the factors that influence investment opportunities and market growth?Unknown Speaker:Absolutely. A main driver is interest rates. During the COVID situation, interest rates were exceptionally low, around 2, 3 percent. However, they've since increased to around 9%, meaning people now have to pay three times as much in interest compared to 2020. This change has had a notable impact.Claire Northfield:That sounds like a big shift. Can you elaborate on how multiple offers and seller flexibility come into play in an upturn?Unknown Speaker:In affluent areas such as the tri-state region, the real estate market often operates under different dynamics compared to other, less affluent regions. One notable aspect is the occurrence of multiple offers on properties. Multiple offers happen when there are more potential buyers interested in a property than there are available properties for sale. In this competitive environment, sellers have the advantage of being able to choose the best buying option from a pool of interested people. In the past, interest rates were really low, hitting at around 2.5%. Affordability means that low interest rates make it more affordable for individuals to secure a mortgage. When interest rates are low, the cost of borrowing money to purchase a home is reduced. People then find it more cost-effective to take out mortgages, and this makes it possible for them to consider purchasing more expensive properties, such as million-dollar houses, because the monthly mortgage payments were relatively lower. In another case, increased demand means that lower interest rates also tend to create demand in the real estate market. When the cost of borrowing is low, it encourages more people to enter the market, which raises the competition for available properties. When individuals have stable employment, it instills confidence in their ability to meet long-term financial obligations, such as mortgage payments. A good income not only enables them to make down payments and cover property expenses but also contributes to overall economic stability. Low interest rates are a game-changer, as they reduce the cost of borrowing for home purchases, making home ownership more affordable. This combination of factors encourages demand in the real estate market. When consumers have confidence in their financial stability, it creates positive momentum, driving market growth and enhancing property values.

Interview 1 Continued: Claire Northfield:Now let's talk about a more localized factor, the role of property owners. How can property owners impact market stability?Unknown Speaker:Property owners are responsible for the upkeep of their properties. When they neglect this responsibility, properties can deteriorate, diminishing their market value. This not only affects individual properties but also the overall perception of the neighborhood. The decline in property values can potentially lead to instability in the broader real estate market. Property owners need the financial means to fulfill their obligations, including property taxes, insurance, maintenance, and mortgage payments. In cases where owners lack the necessary income to meet these financial commitments, it can result in mortgage defaults. Mortgage defaults often lead to foreclosure, wherein the property is repossessed and typically sold at a discounted price. These distressed sales can disrupt market stability by introducing lower-priced properties that may negatively impact neighboring property values.The actions of the owners also extend to the well-being of the community. Neglected properties or foreclosures can reduce the appeal of the neighborhood, potentially leading to lower property values, increased crime rates, and a decrease in overall community desirability. This can discourage potential buyers or tenants from investing in the area, further destabilizing the local market. The ability for the owners to uphold maintenance, meet financial commitments, and contribute to the overall quality of the community all directly influence stability. Neglecting those responsibilities or experiencing financial difficulties can set off a chain reaction that impacts all of what I’ve mentioned.

Interview 1 (Realtor Perspective):Claire Northfield:Ok so my first question is, what are some of the key factors that could potentially trigger a downturn in the real estate market? For example, can certain factors impact property values and market stability? Unknown Speaker:There are definitely two main factors that come to mind, inflation and recessions.Claire Northfield:What specifically about inflation? How does it play a role in the real estate market's stability?Unknown Speaker:Inflation is a complex economic phenomenon with several implications for the real estate market. When inflation rates rise significantly, it raises the purchasing power of money. This has a direct and indirect effect on the market. The direct impact is related to the increasing cost of purchasing and maintaining real estate properties. As the value of money diminishes due to inflation, it takes more dollars to buy and maintain properties. This means that prospective homebuyers may find it more expensive to make down payments and pay off mortgages. Existing property owners may face higher costs for property maintenance, repairs, and renovations, as the prices of construction materials and labor tend to increase with inflation. Indirectly, inflation can affect the real estate market by influencing interest rates. Central banks often respond to rising inflation by increasing interest rates to curb the excessive growth in prices. When interest rates go up, it becomes more expensive for individuals to borrow money for mortgages. Higher interest rates can discourage potential homebuyers, leading to decreased demand in the real estate market. So overall, inflation not only directly raises the costs associated with real estate transactions and ownership but can also indirectly impact the market through the adjustment of interest rates. This dual effect makes inflation critical in understanding the dynamics of the real estate market's stability during periods of significant inflation.