The truth is that interest rates will rise before this chapter in the story of our economy ends.
It is also inevitable that when they do rise, they will rise QUICKLY!
Thus far, the Powers that be have effectively (artificially) been able to enable us all by keeping the rates low . . .
As Gary Keller said: "When the American public stopped spending, SOMEONE had to spend . . . so the Government has stepped in and has been doing the spending for us to keep the economy moving and hold off inflation."
The trick is that eventually even the government will have to decrease spending . . .
This comes to mind for me today as I remember that when I got into this business of selling houses in 1993, the interest rates were for the first time in YEARS just dipping below double digits . . . and there was veritable dancing in the streets.
From then until now, we have all enjoyed hilariously LOW interest rates and have reaped LOTS of rewards . . .
and we have been cruising along "borrowing Buyers from the future" and basking in our gluttony.
I think we are finally at the point where we are going to need teenagers to start buying houses because nearly 70% of all other humans in the USA now own houses . . . The pool of available Buyers HAS shrunk because we created such a "friendly" home buying experience.
So here's my message . . .
Don't let yourself stay in denial . . .
RATES WILL RISE!
and
When they rise, they will rise QUICKLY!
If you're alive and have the ability to buy a house, NOW is the time to do it . . . PERIOD!
And REALTORS . . . If you are not a die-hard believer in this and are not communicating this very real threat of rate increase to your sphere of influence, I recommend some level of therapy to pull yourself out of denial.
A YEAR AGO, Keller Williams Realty published a brochure entitled "What Are You Waiting For?"
Did you know that a 1% increase in rate results in @ an 11% DECREASE in Buying Power?
Here's how that looks:
When that brochure was created, rates were @ 6.04% (Today, they are significantly lower)
$218,900 Selling Price @ 6.04% . . . Payment = $1,054
Add a 1/2 point to the rate @ 6.54% and the selling price drops to $207,955 for the same payment.
Add another 1/2 point to 7.04% and the Buyer power decreases to $197,010 for the same payment
Just imagine what happens when the rates jump SEVERAL points in a relatively short period of time???
Get yourself out of denial and PAY ATTENTION to the probability of this happening.
How will this affect Home Buyers and Sellers?
What will we need to do differently to keep the market flowing?
These are the questions we need to be addressing NOW.
Oh yeah!
and it can't hurt to educate our potential Buyers a bit . . . If they are standing on the sidelines waiting for values to fall further, I believe it would tragic for them if interest rates ROSE while they were waiting.
I'm just sayin'
Best,
b
Barry Owen
Principal Real Estate Broker
Keller Williams Realty
30 Burton Hills Blvd Suite 175
Nashville, TN 37215 - Green Hills
Call me: 615-568-2123
Text me: http://www.mycricket.com/sendtextmessage/ 6155682123
email me: barryowen@kw.com
Visit The Owen Group http://www.theowengroup.net
http://www.owengroupnashvillehomes.com
Barry Owen's Internet Portal to all blogsites, websites, and social networks
http://tnrealestatetribalhub.wordpress.com/2009/06/02/barry-owens-web-portal/
Simply & BOLDLY Living the FourFold Way in Open Space!
Quintessentially connected to the real estate industry to offer the ultimate experience for Home Buyers and Sellers in Middle Tennessee . . . Inquire within!
Comments(2)