A New Year is Coming! What does it Mean to Real Estate?

Unemployment down; ok, maybe some creative bookkeeping there but, nevertheless, the NYSE rose nearly 200 points on the news.  As a rule, that could be an omen of rising interest rates.

Another interesting development is jumbo mortgage rates lower than conventional.  That is practically unheard of out there.  Lenders are able to be more competitive  because these loans are not backed by Fannie or Freddie and are not government insured.

Inventory continues to remain ridiculously low.  Even during this "off season", lack of inventory is still keeping prices high.  This is also reducing the time it takes to sell homes.  I have often said, if the home doesn't sell within a week or two, you might want to reevaluate.  Prices are rising and they may catch up eventually, but long days on market are not attractive to buyers (except lowballers).

Even with fewer sales, prices are holding steady.  Once buyers return to the market, I expect prices to be driven up again.  If interest rates go up, I think that will spur more buyers on than it will price others out of the market.

There is also a shift in the price of homes being sold.  For quite a while, the only homes out there were smaller and on the lower end.  Now we are seeing more higher priced homes.  In fact, another shift is more higher priced homes are distressed sales.

I guess the reason for the random facts is to demonstrate where the market is and where it is heading.  We hear the doom and gloomers say interest rates will rise and price buyers out of the market, that jobs are still a drag on the economy, our deficit will ruin us and the next foreign country with financial issues will drag us down.  I don't see it.  Get ready for another wave of price increases.  This will be one of the greatest times in history to make equity on your current home, use that to buy into a move up property, get great rates and take advantage of timing.