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written by Anthony R Ianniello, Esq.President, Ianniello Anderson, P.C.

Most people are aware of the volatile stock market, the volatile bond market and the volatile real estate market. The real estate market differs from the other markets because real estate is local. The Capital Region itself has further localized markets. And there are pockets within the localized markets.

Regardless of the mantra that real estate is local, however, all real estate markets throughout the United States and other countries are directly impacted by the monetary and fiscal policies of their respective federal governments. In short, the spending policies and interest rates adopted by the relevant national government entities will, in combination, drive interest rates up or down. The recent rapid and large interest rate increases promulgated by the Federal Reserve are without precedent. The goal for this policy is to reduce high levels of inflation that have permeated and persisted within the last year. High inflation was not transitory as was proselytized by the Federal Reserve Chairman, the Treasury Secretary and the President. Most economists accurately predicted an inflationary surge because interest rates were kept exceedingly low for too long and spending authorized by Congress was out of control.

Spending continues unabated so fiscal policy has continued to exacerbate inflation.

So what is left to dampen inflation? The Federal Reserve has been left alone to deal with inflation. Its major tool is to hike interest rates with the hope that the demand for goods and services will decrease thus lowering prices. Accompanying lower prices would be a reduction in the high levels of employment. Of course, this policy ignores the main culprit which is supply - not demand.

Real estate may be local but national fiscal and monetary policies have directly and negatively impacted all real estate markets. The result has been a stunning decrease in mortgage applications. The current number is the lowest in twenty-eight years.

For the most part, houses are purchased and automobiles are purchased based on the monthly payment. Do the math and it is clear why sales of existing homes have decreased for the twelfth consecutive month. A seven percent (7%) mortgage versus a 3 ½% mortgage difference in one year makes many potential buyers unable to qualify for a mortgage to buy any home. Likewise, the average lease payment for an automobile has gone from $400.00 per month to over $900.00. Exacerbating this situation from the resale perspective is that home prices in the Capital Region have not deteriorated. Values rose during the aftermath of the Covid pandemic but have not significantly receded. Current homeowners are not purchasing upgraded homes or downsized homes because the current interest rates double their mortgage payments and render them unqualified for a new mortgage.

The new home market has been upended for the same reason plus has been further exacerbated due to the sudden and dramatic increase in the cost of materials and labor. A newly constructed home which previously cost $400,000.00 in the Capital Region now costs in excess of $500,000.00.

The Federal Reserve has two mandates: 1) minimize inflation, which erodes purchasing power; and 2) maximize employment. Unfortunately inflation cannot be appreciably dampened when unemployment is persistently low and fiscal policy is continuing to flood the economy with dramatic infusions of the money supply. The recent unanticipated "hot" inflation numbers coupled with very low unemployment numbers will inevitably drive the economy into a recession as the Federal Reserve continues to raise interests. This philosophy of unabated interest rate increases will eventually cure the patient by killing the patient.

One of the biggest challenges in the Capital Region will be the continuing and seemingly impossible to solve limited supply of housing. Our area has an inordinate number of municipal agencies - over seven hundred as compared to other locations in the state and elsewhere with one governmental body. Think of the number of cities, towns, police departments, zoning boards, legislative bodies and so on. The cost and complexity of obtaining the requisite approvals for housing projects has discouraged and prevented the construction of low and moderate income housing. The "not in my backyard" movement is alive and well.

The region has seen a steady increase in population growth in recent years, but the housing supply has not kept pace with demand. This has resulted in a tight housing market, with low inventory for both resales and new construction all at stubbornly high prices.

Another challenge is the lack of affordable housing options. The shortage of available housing has driven up prices, making it difficult for any residents, particularly low-and moderate - income families, to find affordable homes and apartments. According to data from the National Low Income Housing Coalition, the average hourly wage needed to afford a two-bedroom apartment in the Capital Region is $22.39, while the average renter in the region earns just $14.50 per hour.

Despite these challenges, the Capital Region real estate market continues to present opportunities for growth and investment. The region's diverse economy, which includes a thriving tech industry, a robust health care sector, and a growing tourism industry, has created a stable and growing demand for housing and commercial properties. Additionally, the region's strong infrastructure, including a well-developed transportation network and a highly educated workforce, makes it an attractive location for businesses and residents alike.

In conclusion, the real estate market in the Capital Region of New York presents a number of challenges but also opportunities for investors and developers. The limited housing supply and the lack of affordable options are the biggest challenges, but the region's growing economy and attractive location make it an important market to watch.

In 2011 Mike Caldwell created Casascius Coins. These coins are about 30mm in diameter and 3mm thick and are minted in brass, silver, and gold. The front of each coin is stamped with a unique Bitcoin address, and the back is stamped with a hologram that shows a tamper-proof design. He also funded these coins with various amounts of Bitcoin. The Brass coins have 0.1btc and 1btc amounts on them. Silver coins have 10btc and he even minted and funded a 1 troy ounce gold coin with 1000btc on it, worth $23,000,000 today! The irony of these coins is that we went from metal coins, to digital money and back to metal coins again.

These analog storage methods are great for coins that you want to keep for longer term investment. They are known as cold wallets and their main advantage is that they can’t be hacked by some group online. They are completely disconnected from the internet and the bitcoin just resides there, untouchable. 

A hot wallet, by contrast, is one that maintains an active connection to the Bitcoin Network. Bitcoin Core is one such wallet, but over the last 10 years modern alternatives have appeared. Exodus is both a desktop and mobile app wallet that allows you to store many types of crypto and gives you access to your private keys. Trust Wallet is another example of a hot wallet app with private key access. These modern standalone wallets even have a mnemonic phrase feature. With just 2 dozen words in a specific order you can gain access to all your crypto stored in the wallet. This means if you need to delete the app, or your phone is destroyed, all you need is the seed phrase to restore all your crypto.  

Lastly, I want to mention hardware wallets. These are similar to USB drives but with some additional software installed that allows the owner to use mnemonic phrases for recovery as well as interfacing with blockchains to allow users to send and receive their coin. These are good methods of storage because they can act as both a cold and hot wallet. Cold when you keep it in your safe, hot when you plug it into a computer connected to the internet. The Ledger Nano and Trezor Model T are the industry leaders in hardware wallets.

As you can see, there are many ways to maintain custody of your own crypto and it may seem tempting to leave coins on an exchange where you bought them for good reasons: firstly, you don’t pay the transfer fee to send them to a private wallet, and secondly, it gives you access to a market for liquidation when Bitcoin spikes. History has shown, however, that there is risk in trusting centralized systems that “hold” your crypto as a convenience. Central exchanges should be used for what they are good for— a medium of exchange, not storage. Users should get comfortable with moving coin to and from these exchanges when they want to trade it; and as for the fees incurred, consider it insurance for the safety of your wealth.

Remember, reader: not your keys, not your coin.