White Hot vs Red Hot

When measuring the temperature of steel when heated by noticing its color, white-hot occurs at temperatures above 2,400 degrees. Heating steel to 900 degrees and up produces a red-hot color. Of course, both examples are really hot, but there is certainly a difference both in temperature, and appearance.

Likewise, when I’m asked about the current state of the real estate market, I use this simple analogy to explain that while we see a softening, we are still in a red-hot market. Homes are still selling at a brisk pace, and values are still going up, it is just that compared to the “white-hot” market of the last two years, “red-hot” just appears slower. I don’t know about you, but I’ll take a red-hot market every day!

The other question I’ve been asked lately is about rising mortgage interest rates and inflation. While we don’t like to see either scenario, it is interesting to note that during every inflationary period going back to the 1970s, mortgage interest rates actually dropped an average of 1.8%!

Inflation, recession, and mortgage interest rates are never permanent, but it looks like the housing industry is poised to continue its growth albeit at a more normal pace.

Jonathan R. Krause, President, Gambino Realtors

815.282.2222 | www.GoGambino.com