2017 IS going to be REAL -
Real opportunity, Real interest and gone REAL fast !
Buyers get it and feel the pinch - rates, absolutely, WILL rise and that means Buyers can buy less house for the same $$.
Sellers - take note here.
Sellers have dominated the market over the last 3 years, overall.
Supply has NOT met the demand and appraisers have enabled property values to inflate due to the demand and, subsequent, shortage of inventory.
Essentially, appraisers have no choice when the pickings are slim and competition, on the Buy Side, is high.
Well - things often change and it's going to.
A healthy economy, real estate wise, ensures mortgage rates keep pace with demand to cap values with a Buyers, documented, ability to pay.
This minimizes the risk of default by hedging values in line with rates that eliminate the risk of a Buyer's ability to purchase more house than they can afford, overall.
Fed has confirmed rates, absolutely, WILL INCREASE in 2017.
THAT action is going to create a counter-balance in the real estate markets across the board.
In simple terms, it means that higher rates equate to Buyers having to "downsize" their pricepoint in home shopping.
Think about the sweet spot of home values/prices.
Most affected, here in Western WA/Seattle Metro, will be the homes priced from 350K to 600K, my estimate/opinion.
In November, 2016 - 30 year MRs were at 3.73%.
As of 1/25, 30 year MRs are at 4.32%, which is more than a half a point (percentage) higher AND likely to rise as, Spring, 2017 approaches.
Once Buyers become, more, restricted - so, too, will be Sellers whose homes sell to Buyers dependent upon bank loans.
In simple terms, a Seller can ask for whatever price they feel represents the value of their real estate, but if Buyers can't afford to buy them .......yup, values cap and the market shifts to favor the Buyer.
REAL Enough ?
Have questions/concerns ?
Contact me if I can be of service.
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