Why There’s No Time Like The Present in Real Estate
To say it's been an active time for financial news since the start of 2016 would be a big understatement.
A fall in the value of Chinese stock markets at the beginning of last week has had significant knock-on effects that continue to be felt all over the rest of the world, and the US has been no exception.
Further instability in markets was caused last week by news that Saudi Arabia had severed diplomatic relations with Iran, increasing Middle East tensions. North Korea's subsequent claim that it had successfully tested a hydrogen bomb did nothing to help ease the situation.
As might be expected, all these announcements have led to growing pessimism among investors, particularly the concerns over the effects of a slowing Chinese economy. We have consequently seen yet another increase in the popularity of safe haven investments, including Mortgage Backed Securities. We therefore ended last week with lower mortgage rates yet again, despite strong job gains in December, which usually tend to cause rates to move a little higher.
Buyers and sellers will naturally be keen to gain an understanding of what this cocktail of negative news headlines and a rejuvenated tendency for risk aversion means for home purchases or sales?
Once more, we're witnessing how international affairs can have a very direct influence on the price of a mortgage in this country.
The many expert predictions that mortgage interest will gradually rise this year are already being tempered by the uncertainties created by the recent events in financial markets and, to a lesser extent, heightening international tensions.
This is another fine example of why it almost always pays to deal in the present in real estate. Home loan interest rates may still rise but, as we're already seeing very early this year, ever changing and unpredictable world events can very quickly extinguish even the most informed of predictions. We should also bear in mind that we are in an election year - another uncertainty factor that will gain traction as November approaches.
Perhaps all that really matters at grass roots level is that nothing has changed and real estate remains all set for the best year in a decade. Continued low mortgage rates, excellent buyer sentiment, due in no small measure to better overall consumer confidence, first time buyers out in force and, for sellers, the perfect storm of high demand and limited supply of available homes in our area.
I would strongly advise both buyers and sellers to acknowledge the current win-win market conditions for everyone and not to delay plans for months, in the hopes that, for example, mortgage rates might fall even further. Recent events have shown that there are no guarantees. Indeed, today's extremely positive market conditions should be raising the question: "Why wait any longer?"
Call us today for an informal discussion on your selling and/or buying strategies in 2016