My last blog post - a year ago (!) - was all about rising interest rates. So, I'm grown-up, I can admit when I'm wrong. Interest rates continue at more than historic lows. My GRANDFATHER told me he bought his first house at 3%. Contrast that with my dad who mortgaged the home I grew up in in Ohio at 12% until he could refinance later. So, with rates bouncing around the 4% range how much better can it get? And with Bernanke talking about keeping the Fed rate effectively at 0% for the forseeable future, property values in the tank, and consumer confidence up a bit, we're in fat city, right? TIME TO BUY!
And that is exactly what seems to be happening around Wilmington, Delaware. The sweet spot market - homes valued at $150,000 to $250,000 (for the Wilmington, Delaware market) - is moving very briskly now.
We are getting multiple offers on listings in that price range as the pent-up demand from first-time home-buyers begins to manifest itself. Theoretically, that may bode well for the up-market homes. As first-time buyers are finally getting into the market those who have been sitting on these mid-market homes can finally move up, or even out of state to that other job.
What a relief for those of us who have been selling $10,000 townhomes in the city to investors for cash!
BUT - I raise a caveat. There is talk of a recession at the end of the year or the beginning of next year. The fact is the country has borrowed TOO much money and cannot continue on the path it is on. The government is telling us that inflation is in check. But I have to say, anecdotally, everything I buy costs more than it did two years ago. I don't need any government statistics to confirm that - my QuickBook reports of my personal and business accounts show it readily enough. In my humble opinion we have a respite, an opportunity to make hay while the sun shines, over the next several months before the election. My advice to buyers and sellers - make it happen now. All bets are off after the election.