Interest Rates have Nowhere to Go but Up!

By
Real Estate Agent with Coldwell Banker Select

This was the heading of an article in the New York Times on April 10th, the average 30 yr fixed rate around that time was 4.875% according to mortgage-X.com. 

It's interesting that interest rates did indeed go down further, the average rate from the same source now is 4.25% with brief forays below 4%.

http://www.nytimes.com/2010/04/11/business/economy/11rates.html

The Treasury just auctioned off 10B of 5 yr TIPS notes with a negative interest rate.  It is possible that we are looking at a bond bubble, the flight to debt is due to a perceived lack of good investment alternatives although commodities and precious metals have been rising to record levels. 

Although in our area buyers seem to be on the fence due to personal circumstances and worry about the economy, it is currently a great time to lock in a great rate and it's buyers' market.  People tend to act on fear and greed and don't always time investments well in retrospect. 

I often tell the story about buyers in Fremont, California where I was an agent during part of the real estate boom of 1996-2006. (yes, ten years)  There was a forty year old house, 1210 square foot house that we put on the market for $469,000.  In one week we received 23 offers and it sold for $525,000.  There were so many offers that I just put them in a box to review them with the seller, it took about four hours to go over them all considering terms, price and strength of financing to find the three top ones to counter.  My point is that people can have a herd mentality and the best time to do something is not necessarily when everyone else is doing it.

Don't have herd mentality!

 

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Comments (3)

Gay E. Rosen
Julia B. Fee Sotheby's International Realty - Larchmont, NY
As Real as Real Estate Gets!

Hi Peter - Good advice. Gay

Nov 01, 2010 10:22 AM
1~Judi Barrett
Integrity Real Estate Services 118 SE AVE N, Idabel, OK 74745 - Idabel, OK
BS Ed, Integrity Real Estate Services -IDABEL OK

Hi Peter,

Glad to see a post here on AR.  It's hard for people to break out of herd mentality sometimes.  And sometimes it's the safest place to be.  Safe does not always equate with money though.  In fact, it's often the opposite.

Nov 02, 2010 01:51 PM
Peter Tamura
Coldwell Banker Select - Tulsa, OK
BANNOCHIE TEAM

Hi Gay & Judy,

Thanks for your comments, it's quite ironic, sometimes the herd is the same place to be and sometimes the herd is heading over a cliff.  Invest in a good periscope so you can see ahead!

 

Peter

Nov 08, 2010 07:07 AM