Will the banking collapse of 2023 affect alternative housing? 


banking collapse 2023

While we are not experts in all things banking at Alternative Housing Options, we closely watch market real estate markets. The banking collapse last week with Silicon Valley Bank and Signature Bank has wide-reaching implications. It raises questions about what the Federal Reserve will do to try to keep the economy and the banking sector from collapsing, along with a question on interest rates, housing prices, and more. 

According to Lawrence Yu, Chief Economist of the National Association of Realtors®, “The Silicon Valley Bank failure, along with a few other banks, means that the Federal Reserve cannot be so aggressive in raising its short-term interest rates.” He also believes that the mortgage rates will decline as a result. 

How will the banking collapse of 2023 affect real estate? 

In our opinion, it will take time to pan out.

However, regarding real estate, we may start to see the following:

  • rates may stall
  • traditional housing prices may come down
  • hyperinflation is a possibility
  • the 2023 economy may be tough

Unfortunately, this is all speculation, and we won’t know until we are in the thick of it. 

financing-an-alternative-house

How will the banking collapse of 2023 affect alternative housing?

Material prices can rise with hyperinflation. Lending for alternative housing has been challenging. If we run into a hyperinflation economy, cash may not get you as far in the building process. 

What should you do about alternative housing in 2023? 

If you have been dreaming about your own tiny house, container home, cob home, silo house, aircrete house, or any other twenty alternative housing alternatives we love, it may be a good year to plan and save.

Start local – Start by meeting with your local building department to see if you can build an alternative house in your area. If so, contact contractors who build alternative houses or research plans if you want to DIY. Once your plans are solidified, or a contractor is ready, you can search for land. 

Search for land– Land prices may come down depending on how strapped the current owners are for cash. Pay attention to your local economy and do what you can to save money to take advantage of lower prices if they materialize. 

Review the costs – We’ve written many articles on cost. Depending on the type of home you’re considering, you could be a savvy builder and use more recycled or reusable material, earth, clay, straw bales, and other natural resources to keep your project costs low. 

Make a plan – Now may not be the best time to start building, but saving and planning take time. With the uncertainty of the real estate market, waiting looks like a good play and an excellent time to explore all that alternative housing has to offer like:

  • Faster build time than traditional homes
  • Less cost for the initial build than a traditional home
  • Possibility to be creative and put your personality into the home
  • There may be some challenges like:

It may involve more upfront planning and prep work 

  • Financing can be tricky – check out our article on financing options
  • Your local area may not allow all forms of alternative housing

No one knows exactly what’s going to happen. Moving forward cautiously regarding the traditional housing market or building an alternative house right now is best. Educate yourself on the types of housing available and the alternative lifestyle you might like best. Explore the articles on our site for more info. 

Eva

Eva is a freelance copywriter specializing in all things real estate, B2B, PropTech, ReTech, CRETech. Owning rental property herself, Eva's love of real estate has turned into a passion for alternative housing options and educating people about the different types of housing available.

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