With the rising interest rates people are panicking! But fear not, as I have some statistics on hand to show you how that’s not as worrisome as it may seam.
Interest rates are indeed going up, in the last two weeks alone they’ve jumped up by nearly a quarter of a percent! When the stock market is red that usually means that interest rates go down, so why is the reverse happening? First off, the stock market is at an all time high so these small changes in the stock market are becoming less of a factor on bonds. Secondly, rates have been so low that mortgage companies are bogged down, meaning they can push rates up. And last but not least, their is so much money out there that investors are seeking safe investments so the Bond market continues to see plenty of capital. However this is not a concern because even if interest rates went up as high as 3%, they would still have to go up by another 1% or so to really affect our market.
Honestly rates going up would probably be a good thing. We’ve seen over 14% appreciation over the last twelve months. This isn’t necessarily a good thing for the market as a whole (however being a homeowner right now is pretty awesome).
Our inventory this month was down by 44% compared to the same time last year! We also had only about 1500 new properties come onto the market, yet almost 3000 homes go off the market! Hence interest rates going up won’t necessarily affect a market that doesn’t have adequate inventory to begin with.
The Factors At Play
Among the obvious factors would be the low interest rates that attract buyers, COVID concerns resulting in folks not wanting to list their properties on the market, etc.
Despite all these concerns, you can’t deny the fact that real estate is probably the safest and least volatile investment instrument out there, especially during such times. The speculation about the government printing money and the possibility of further inflation drives people toward gold, silver and property as these are limited resources which hold their value. When you’re 20% down with an 80% mortgage that’s fixed for 30 years, that mortgage offers you great protection against inflation.
As a seller, if you’ve had an under-performing property and have been looking to sell it off, now is a phenomenal time to close that sale! With inventory being at an all-time low, you can ask for a premium on your property and perhaps even break a sales record in your neighborhood! However, you still need to get that asset market ready with stellar marketing. Give us a call if you’d like some advice related to that 😉
As a buyer, you need to aggressively pursue the right property and be ready for viewings at a moment’s notice. There are agents out there that are accepting the first offer that comes in, which is mind-boggling yet still happening! And you definitely want to take advantage of this trend while it lasts. We here at True Local Realty can help you do that, as there’s always someone ready to show you a property immediately.
We hope you enjoyed this article!
If you ever have any questions at all… please reach out to us!
- If you are thinking about buying or selling we would love to help!
- Visit us at TrueLocalRealty.com
- Or give us a call at 888-503-3117