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Delaware Real Estate Market

By
Real Estate Agent with Patterson Schwartz

Yes, there is a lot of confusion about the state of the economy and the Delaware real estate market. Things have seemed more optimistic lately. Buyers have been hopping off the fence and the market is active. Interest rates are great and tax advantages are still here for a while. This is wonderful news for lots of buyers, sellers, Realtors® and other real estate related businesses. The Delaware real estate marketlike the markets across the country, has made substantial price adjustments, it had to. Prices kept soaring and buyers kept scrambling until it got so far out of hand that the bubble burst. Prices were out of line with buyers incomes. Of course there's much more to it than that, but that's really the long and short of it. Although things do seem optimistic right now, whether we are buying and/or selling, we must be very cautious and aware of the big picture. Here are some things to be aware of: 

Fact 1. The U.S. Government jumped into the mortgage market and among other things they've done to spur the economy they've bought into the mortgage business and kept rates down for good reasons. 

Fact 2. The government has announced that it will be backing out and opening the mortgage industry up to the control of the private sector at the end of March 2010. You can guess what will happen - rates WILL go up and they will likely spike.

Fact 3. As rates increase substantially, so will inventory and eventually prices will be forced down again. For every 1% increase in interest rates buyer cost will increase meaning prices will be forced down. 

                      

                          Price Decline Chart

Historically when interest rates spike, they go higher than the previous substantial increase. (see below chart) It's inevitable that this will happen and it's likely to be soon. If you're sellingand then buying again locally within a short time frame, you are likely to be just fine. Just be aware of what's happening around you on a bigger scale as it is going to affect all of us. Get good advice and straight answers about the Delaware real estate market from seasoned Delaware real estate experts Diane & Dave Iliff with Patterson Schwartz Real Estate. They can give you straight answers and the best advice.

                          Interest Rate Chart  

 


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