With so much happening on the national and international political front, our long running real estate recovery seems to be taking a back seat in news headlines these days. That said, there remain many important items of note that we need to keep our clients and friends aware of.
Government agencies, and also our local MLS, report that existing home sales (closings) fell in January for the third straight month. We believe the main cause of this to be a function of low supply. A secondary, although far lesser cause, can likely be tied to the rise in interest rates we all experienced at the hands of the Federal Reserve Board last year. (Of course, rates are still at historically low levels!) The rate increases, coupled with rising home prices, began to bring affordability discussions into the mix around mid-year. Since that time however, interest rates have actually dropped, making home ownership a bit more affordable than in late 2018 and bringing more buyers back into our typically busy spring market. At Restaino & Associates, we have hundreds of buyers ready to purchase as soon as the right home comes onto the market. If you have been considering selling, you have not missed the boat by any means.
Here’s where the news gets better:
Year over year inventories are up now for the 6th month in a row. This will boost sales as buyers will have more homes to see and to pick from. If there is a downside to the rise in inventory, it could be slowing price growth. And while slowing price growth is not the absolute best news if you are a seller, it is still growth. Most important to note is what may not be gained as the result of a “highest bid” market when selling, will be saved when purchasing up (or down) into that same market. It’s all relative and always has been.
The biggest factor in affordability: interest rates. And those are down from 3rd quarter of 2018 levels. Rates appear to be holding for now. A recent survey of economists who monitor the actions of the Federal Reserve Board estimate that interest rates are likely to remain at current levels through June 2019. The most recent results of that survey, which handicaps the probability of rate increases by the Federal Reserve at their next three meetings, are:
March 20: . . .5% chance
May 1: . . . . .9% chance
June 19: . . . .14% chance
As the “glass is always half full” type of organization that Restaino & Associates is, we interpret a “14% chance of an interest rate increase” to mean “there is an 86% chance interest rates will stay the same!”
Can those forecasts change? Of course. When? On a moment’s notice. So what should a smart seller or buyer do to protect themselves and their families?
In this fast-paced world where news affecting our personal and financial lives can change on a dime and circle the globe in a matter of seconds, it is important you have a trusted advisor on your team to help advise you on the part which, for majority of us, is our most valuable financial asset: our home. At Restaino & Associates, we value the trust that our clients and friends have placed in us for many decades and strive to maintain that trust every day. Thank you again for the confidence you place in us.