If you’re thinking of buying a property, you should move forward with your plans now. According to one lender I work with, last week she saw an increase in interest rates every day. While most of us have been predicting that rates would hit 5% by the end of year, we have already reached (and exceeded) that percentage.
As interest rates increase, your buying power decreases. Let’s say your lender has qualified you for a home purchase of $700,000 with 20% down. A month ago your monthly payment would be around $2,837 with a 4.5% interest rate. At 5% that payment would be $3,006, or $169/month more. Your lender may no longer qualify you to purchase a $700,000 home but instead more likely around $675,000 to keep your payment around the $2,837/month. If we see a 7% (being conservative) increase in prices this year, your $700,000 home would sell around $750,000 by year end. By waiting, you are likely to decrease the amount you can pay for a home.
If you’re considering buying a property this year, the time to move is now. Give me a call at (206) 790-0081 or email Jamie@JamieFlaxman.com so we can talk about your plans and needs.
Today’s real estate market offers a fabulous opportunity to successfully sell your home for top dollar.
Why do I think now could be the right time for you to sell?
The economic climate has improved. Consumer confidence is high and unemployment is low. Combined, this has impacted all parts of the economy – including housing. The demand for homes significantly outweighs the availability of homes to purchase.
Unbelievable mortgage rates. Low rates equate to the largest possible pool of qualified buyers for your home. However, interest rates are on the rise, which will decrease affordability for many buyers.
Average sales prices have increased, and average market time has decreased. With prices rising, your opportunity to get the price you want is better than it has been in past years and your timeline to receive an offer is shortened as well.
Your needs may have changed. Have you had changes in your lifestyle (retirement, a new job, marriage, divorce, children, or parents moving in with you) or your health which have changed your housing needs? If so, now may be the time to sell.
I would welcome the opportunity to talk further with you about whether now is the right time for you to sell. Just give me a call/text at 206-790-0081 or send an email to Jamie@JamieFlaxman.com to set up a time to chat!
Here’s to a happy and healthy New Year!
May all your dreams and wishes be realized.
Stay Tuned in 2015 for:
- 2014 Seattle market update (January)
- Fabulous Seattle homes for sale
- Monthly videos created by me
- And much more
And to Start the Year Out Right, here are my predictions for the 2015 Real Estate Market:
Each year I review what has happened during the year, research what the experts say for next year, and share my thoughts on what will happen in the market in 2015.
Median Sold Prices – Home prices will continue to increase nationally by single digit numbers, between 5-6% whereas Washington State home prices will increase around 7%. Urban metro areas (such as Seattle) in high demand by millennials will see an increase probably in the double digits. Home prices in October 2014 were up by 6.4% year-over-year, after climbing 10.6% in 2013. There are still areas of very high demand and low inventory which will continue to push prices upward. However, many homeowners surveyed suggest they will sell their homes next year, increasing potential inventory and putting downward pressure on prices.
Inventory – It is a good thing that more homeowners are expected to sell their homes next year as I predict that more buyers will be entering the market for a home. Improved job markets and lower unemployment rates, along with stabilizing home prices and fewer bidding wars, will bring more buyers into the market. Buyers who left the market in 2014 due to disappointment over lost offers will return. Increased inventory and slower market time gives buyers the time they need to get financing and look at more homes. The bottom line is inventory will increase due to more sellers in the market, but I expect that buyers will be purchasing that inventory, so there won’t be big fluctuations either way.
Interest Rates & Mortgage Availability – The improving economy is a sure sign that interest rates will increase in 2015. The new rates will balance job growth and higher inflation rates. The Federal Reserve indicated it will increase the federal funds rate in 2015 (the federal fund rate has a significant effect on mortgage rates). I expect the 30 year fixed rate mortgage rate will reach 5% by the end of 2015. Government officials have also indicated that mortgage credit should become more available in the foreseeable future, which will allow more buyers to qualify for a mortgage and will allow some people to qualify for a lower-rate mortgage. The FHA is raising its loan limits for King, Snohomish and Pierce counties to adjust for rising median home prices; the loan limit in 2015 for a single-family home is $517,500, up 2.3% from $506,000 this year. Additionally, the FHA is bringing back loans with only a 3% downpayment.
Foreclosures – The foreclosure crisis is near its end. 2014 saw foreclosures down 30%. We will see a further decline in 2015 with a return to low levels.
These are just a few of the things I predict 2015 will bring us. For further information, please don’t hesitate to give me a call at (206) 790-0081 or emailJamie@JamieFlaxman.com. I would be happy to share what my 2015 predictions mean for your real estate holdings.