I was at a holiday party in the snow in Boston last night thrown by one of the best attorney's I've ever worked with (Kosta Ligris - http://www.ligris.com/ for someone who really deserves the praise - incredible attentive service to buyers and sellers and just one of the smartest lawyers I've met). In talking with the brokers there, I heard a common theme - "I've never been this busy at the end of the year"; "I'm busier than I've been since April"; "the phone is ringing . . . and ringing"; "I had 19 (or 12 or 25 or . . .) people at my open house"; "the listing's been on the market since late September, but now I'm getting second showings."
It's easy to look for reasons why the market would be slowing down - families having holiday celebrations on their minds, people starting on early vacations, the weather going below the freezing mark (and snow actually on the ground this morning). Yet we're seeing new buyers entering the market, and existing buyers thinking seriously about buying.
The spike in interest rates (I had clients refinance recently with Dana Rosenblatt - again, a plug here - he's one of the most attentive, knowledgeable and aggressive mortgage brokers I've ever met and repeatedly finds the best rates in the market and then gets the deal done - he's at xdangerous@aol.com and worth sending an email if you're buying or refinancing - I'm hearing about amazing rates on jumbo fixed loans as well as conventional from him) has likely had an affect.
The rates are bouncing a bit, but buyers are realizing that the days or 4-5% interest rates will not last forever (we bought only a few years ago and were thrilled at getting 6.75% on a conventional at the time). The difference between a 4.5% rate and 6.5% rate on a $400,000 loan is roughly $500.00 a month! To look at it differently - if rates go from 4.5% up to 6.5%, a buyer who could afford a $400,000 loan today would only be able to afford a $320,000 loan - that's $80,000 less in purchasing power. With 10% down, if you pass up a house for $445,000 with 4.5% rates your mortgage is a speck over $2,000 a month. To keep that payment, the price would have to fall to $355,000 if rates go to 6.5% - if you still have to pay $445,000, your payment balloons to over $2,500 a month. And a 6.5% rate is not at all unreasonable (we're not talking about the 10-15% rates our parents paid).
We're also seeing a lot of people take their homes off the market (I've blogged about this before - as long as you can keep up with the snowplowing, I'm a big supporter of keeping your home active during the holidays - if you're home isn't on the market, I'd talk with you individually about whether to wait until mid-January to introduce it - often a good idea). This is leading to a shorter supply of inventory for those in the market, which is also adding to the strength of the market.
All in all, it's a good sign on the local (Boston and surrounding communities) level. I'm looking out for a very very early start to the Spring market of 2011 - maybe the second week of January depending on the weather! Happy house hunting :)
(As always, the market for real estate is incredibly local - trends discussed may varry from community to community. If you are thinking of buying or selling, call me at 617-593-5685 or email todd.glaskin@gmail.com I can either help you in your town if I'm an expert in your area, or can help you find the most skilled professional to assist).
No comments:
Post a Comment