Lack of real estate inventory is driving the demand for housing and prices are beginning to inch up.
The reality is that buyers are now competing for homes and condos in the tri-state area and it seems the tides have begun to turn. Multiple offers on fewer and price reduced homes have some buyers wading back into bidding war situations. Prospective buyers are competing for a shrinking pool of homes, spurred by rising rental prices and the fear that they’ll miss out on historically low mortgage rates.
The rising tide of interest rates may put a damper on the amount future of mortgage applications. The rates rose for the 9th week in a row to an average 4.68%. Although the rates are still at historic lows, the increase in interest rates translate roughly into 15 to 18% less house for the borrower. For the moment, however, buyers are jumping in to make their purchases and lock in their rate before another rate increase.
According to Jonathan Gray, Global head of Real Estate for the Blackstone Group, in a recent article on CNC.com, “Though many are focused on the recent rise in home prices, prices are dramatically below 2006 levels in a number of markets. We are continuing to buy.” (1)
Reduced inventory in the local market means now is the time to sell. More buyers are seeking homes and they are willing to invest in their home purchase before the current market changes again. Seller’s that price their homes competitively and according to the current market trends will be able to capitalize on the rising tide.
For further reading:
(1) http://www.cnbc.com/id/100873475 - Blackstone not done Buying Real Estate
http://www.cnbc.com/id/100875723 - Interest Rates Surge
http://www.cnbc.com/id/100860098 - Hovnanian on Mortgage Rates
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