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Active Rain Wants Our Predictions: Here's Mine.

By
Real Estate Agent with Bill Cherry, Realtor 0124242

Everyone wants the value of resale homes to increase and they want demand to continue sliding up at a rapid rate.

The hope is that things will quickly return to at least where they were before the gigantic market subsidence that we've dealt with over the past few years.

What was different about this past bad market was that even high incomed and wealthy people all but stopped buying homes.  In my years, I don’t recall ever before experiencing that.

In my own case, in 2011-2012 I had three homes listed in Dallas’ high end market known as Highland Park.  All three in the 7 figure range. Each of them was listed at a substantial discount from what the owners had invested.  

I had all three listed for over a year.  None brought an offer.

Month after month, I studied that market.  There were very few sales; most of the homes that went off of the market did so because the owners leased them.

The market in Highland Park has returned somewhat.  There are sales and that’s a good thing.  But most are still at substantial loses to the sellers.

So How About the Future?

What is troubling is that mortgage rates continue to be artificially set by the Fed, and are not being dictated by the market.

As the real estate market recovers, the Fed is going to want to begin to let rates rise.  That could easily wipe out any rise in real estate prices, as well as stump sales.

William S. Cherry & No Company
America’s Wealth Coach
972 677-7028

Comments(3)

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Brad MacKenzie
Brad MacKenzie - Duxbury, MA
Turning Houses into Homes on the South Shore

If the often-repeated "anticipated rise" in interest rates actually happens, you are absolutely right, in my opinion: lots of people won't be able to sell and lots of people will be priced out of the market by bank greed.  The Fed has promised that banks will be able to borrow at nearly zero percent until unemployment nationally falls below 6.5%, which is widely assumed to be no sooner than the middle of 2015. The banks pocket the spread, and it is pretty wide already!

Mar 26, 2013 05:00 AM
Bob Crane
Woodland Management Service / Woodland Real Estate, KW Diversified - Stevens Point, WI
Forestland Experts! 715-204-9671

Hello Bill, thanks for the market analysis, it sounds as if you have put a lot of thought into what the markets are likely to look like.

Mar 26, 2013 07:51 AM
BILL CHERRY
Bill Cherry, Realtor - Dallas, TX
Broker & Wealth Coach

Brad and Bob -- Thanks for your comments.  I reread the post and was horrified at the mistakes.  I wrote it early this morning when it's obvious instead I should have been drinking coffee!  Forgive them.  I promise my heart was in the right place.

 

Mar 26, 2013 10:39 AM