Dec 2015 Market Update
Real estate Broker Teresa Boardman in St Paul said " we should all get over the Fed hoopla"
December 2015 Market Update -
The Fed is finally trying to save a little face from talking about it for so long without doing it - Actually since 2006. Raising short term interest rates a quarter of one percent. So what happened? I know we all didn't die....
Interest rates were over 6 percent in 2005, and yet we sold more houses that year than we will in 2015. However, when you start with the whole "psychological" thing, we all get "OH NO! The sky is falling."
For the housing market, most industry experts downplay the effect of interest rates, but historically the psychological effect of rising interest rates can be the more powerful movement. It can have a few effects on buyers...
a. Prompting buyers to move quickly before rates rise even more.
b. Or, higher rates may entice buyers, who are already cutting it close with their finances, to hold off buying a house.
In reality, last year at this time you could get a mortgage interest rate around 3% and it's gone up around 4% over the year even before the Fed Rate hike announcement. The Fed doesn't make the home mortgage interest rate and we could actually see rates move in the opposite direction of the short-term rates. It depends more on investors appetite to buy mortgage-backed securities and US Treasury notes (10 year notes). The long-term market is healthy.
Here are a few market statistics for San Diego:
Closed Sales: November down -46% year-over-year. Up+14% Year-to-date
Median Sales Price November down -7.8% year-over-year. Up+14% Year-to-date
Inventory of homes November down -38% year-over-year
Relax and enjoy this Holiday week!
The information Im sending you this month delves into the positive impact of a healthy housing market on the national and local economies. It gives the scoop on the impression housing has on the local economy, specifically the impact of new homes.
Have an amazing week!