By John Rice
I’ll try to remain humble here, but I called exactly what is happening in the real estate market today.
I have always said there will always be a market. There will always be demand. Sometimes the demand will be pent up with people sitting on the sidelines, but they are there, waiting to feel comfortable about making a move. (Typically these people wait until enough other people dive in… and effectively end up jumping into a hot market, which is what they were hoping to avoid.)
I have been saying for months that I thought the market could still be very good with interest rates around 6 percent or less because historically, the past several super hot markets we have seen in our area had those rates and adjusted to average income, real estate values in our area are similar. I’ve said that rates over 7 percent won’t last forever. I’ve also been saying for years that once rates start going up again, people would be reluctant to give up their super low rates, which would create a shortage of listings and would keep prices stable regardless of the market conditions.
I’ve suggested people buy real estate as soon as they are able, regardless of the rate since you can always refinance when/if rates go down, but you can’t go back in time to get yesterday’s home prices.
And now you know what stories are making the headlines? That mortgage applications are up recently due to rates dropping below 6 percent… that refinancing applications are up too…that rates are down…that prices aren’t really dropping in areas that didn’t see crazy stupid price increases.
I am seeing all this myself with my clients. I had two listings that went on the market right around Thanksgiving. One of them was modestly priced, totally updated and in a desirable neighborhood. I really thought it would go fast even though that time of year is usually slow. It hardly got any showings, which is very strange. Then once rates went down we had five or six showings in a matter of days and it sold. When I go to show listings to my buyers lately, most of the time there is another realtor showing the house when I arrive or one that shows up as I am leaving, sometimes both.
John Rice is a local Realtor. He blogs as “The LEXpert.”