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May 26, 2024
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Devon Walden on Quantitative Tightening in the Short Term Real Estate Market

Devon Walden
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Devon Walden is an American Real Estate Professional based out of Indiana. The successful Real Estate Developer & investor has made a career as a capital allocator in one of the largest growing real estate service sectors Short Term Rentals. With a growing portfolio and a pulse on the macro real estate market, we sat down with Walden to get insight on the largest issue in 2023’s financial forecast. 

What is Quantitative Tightening 

Quantitative tightening, also known as “QT,” is a monetary policy used by central banks to decrease the money supply in circulation. This can have a direct impact on the real estate market, particularly for short-term rentals.When the money supply decreases, it becomes more expensive for individuals and businesses to borrow money. 

Walden Shares Insight 

Walden believes that QT can lead to a decrease in the number of people looking to purchase or rent properties, as they may not be able to afford it. Additionally, as borrowing costs increase, it can become more difficult for investors to finance the purchase of properties for short-term rentals. This decrease in demand for short-term rental properties can lead to a decrease in rental prices, and an increase in the number of properties available for rent. This can make it more difficult for landlords to make a profit, and may lead to an increase in the number of properties being taken off the rental market.

Macro Forecast 

Quantitative tightening can also have an indirect impact on the real estate market by slowing down economic growth. When the economy is not growing, people are less likely to move to new areas, and less likely to travel for leisure. This can lead to a decrease in demand for short-term rentals, as people are less likely to need a place to stay while on vacation or for a short-term work assignment.

In conclusion, Walden shares that quantitative tightening can have a significant impact on the short-term rental real estate market. It can lead to a decrease in demand for properties, a decrease in rental prices, and an increase in the number of properties available for rent. Additionally, it can slow down economic growth, further impacting the market. Landlords and investors should be aware of the potential effects of quantitative tightening on their short-term rental properties, and adjust their investment strategies accordingly. 

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