Are prices dropping? Are interest rates RISING? Whats next for housing?
Well first all DO NOT PANIC! In areas I work yes I am seeing pricing FLATTEN or coming down some, BUT what do you expect? We have been on 36 month run upward in areas I service! I think we are do a break, but the prices I am seeing come down are ACTIVE for sale prices. I am not seeing MAJOR pressure against properties that have closed escrow.
WHAT DOES THAT MEAN
Well it means some properties that came to market priced too high to start with and now are being forced to reduce a little bit. A few months ago we were experiencing multiple offers on EVERYTHING which would drive up pricing, some buyers paying above the appraised value which would establish a NEW VALUE. If your neighbor sold at $500,000 30 days ago, we saw (see) sellers pricing like for like properties at $550,000! As we speak THAT is the property that is coming down AND sitting on the market, BUT the seller that prices his/her home at say $499,000 is selling and sometimes above $500,000. Get it?
INTEREST RATES RISING?
We have had a little flucation all year with interest rates but bottom line they are still close to FREE as they will be. Truth of the matter is it is not IF interest will rise but WHEN. I do not know the answer to that question BUT I do know interest rates with most buyers will more of an effect that the price of the property! Interest rates will effect your affordability to purchase and more importantly your monthly payment more than the price you pay for the property.
In my opinion all this means if you are selling is it is still a great time, just be price sensitive and if you are looking to purchase, really try to get in front of the inevitable interest rate hike. Think if you had purchased 36 months ago were your property value would be!