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Buyers "Do you Feel Lucky?

By
Real Estate Broker/Owner with eXp Realty LLC NM Broker License 16161

Buyers, you may remember the famous line in the Dirty Harry movie when Clint Eastwood has just had a shootout with bank robbers and is standing in front of the lone surviving thief who is considering going for his gun. Harry with his gun pointed at the bad guy says to him ""Did he fire six shots or only five? Well, to tell you the truth, in all this excitement, I kinda lost track myself. But being this is a 44 Magnum, the most powerful handgun in the world and would blow your head clean off, you've gotta ask yourself one question: Do I feel lucky? Well, do ya?" 

Ok what are some facts? Our economy has had a long recovery from the great recession, due in most part to the housing crisis of 2007-2009.  Then, the Pandemic hit in 2020 which tanked the worldwide economy but the surprise to homeowners happened to be housing.  2021 became a red-hot market with prices going up by 21% nationally. 

In 2022, mortgage rates have increased by four percentage points and haven't been this high since 2008.  Inflation, at the end of September, reached a 40-year high at 8.2%.  The Fed recently said they'll continue raising rates until they can get inflation near their target of 2% annual rate.

People who own homes have seen their values go up dramatically and so has their net worth. Due to the extremely low inventories and the maturing millennial market, there is a lot of pent-up demand for housing.

This leads us to the scene in the movie.  You may be considering buying a house now but at the same time, you're thinking "Have prices and mortgage rates hit the top of the market so they'll start coming down or will they continue to go up, making it cost more to get into a home?"

The facts are that the U.S. is the strongest economy in the world.  The housing bubble of 2007 was created by over-inflated property values and predatory lending practices.  Those conditions don't exist today.  There is a housing shortage in America due to not enough homes being built to keep up with demand and people staying in their homes longer.

Homeowners have record amounts equity in their homes and foreclosure rate hit a historic low at the end of 2021 even though it edged up a bit in spring of 2022 as reported by CoreLogic.

Homes are expected to continue to appreciate but not as fast as they did in 2021.  The revised predictions for 2022 appreciation vary from Fannie Mae at 16%, Freddie Mac at 12.8% to NAR at 11.5%.

NAR Senior Economist Nadia Evangelou recently said "Mortgage rates are a heartbeat away from the 7% threshold. According to Freddie Mac, the 30-year fixed mortgage rate rose to 6.92% from 6.66% the previous week. While inflation remains elevated, mortgage rates will continue to move up, making homeownership even further out of reach for many."

What does this mean for you? If the home you could buy this year for $500,000, will cost you $550,000 next year and the mortgage rate goes up from 6.5% to 7.5%, the payment will go from $2,844 to $3,461 based on a 90% mortgage for 30-years.

If interest rates are temporarily high based on the Fed's position to lower inflation, a home could be purchased at today's price and refinanced later when the rates come down.  5/1 adjustable rate mortgages allow a borrower to lock in a lower initial rate for five years which would allow a person to find the best time to refinance.

So, back to the movie scene... "you've gotta ask yourself one question: Do I feel lucky? Well, do ya?" 

I get it, life is not a movie and every situation is different. The bottom line is let's talk and see what is possible for your future in Santa Fe. Not sure? Why not take a look here and let's connect.

Posted by

Our Santa Fe real estate market is a local one. Search All Santa Fe Listings Here and get results in both an easy list or map search. If you want to see a SOLD sign on your property or you want to make a lifestyle change by moving here, call me at 505-660-4541 to schedule your real estate consultation. No one has time or money to waste in this new landscape of real estate online without an experienced broker working for you. I am available to make a positive difference in your real estate experience. Remember dreams are made a reality only when you act on them. Emily Medvec

Today, I represent Sellers and Buyers in all price ranges in Santa Fe and throughout northern New Mexico. My focus is to use my experience, vision and strategies to find you opportunities and solutions. My goal is always to save you time and money whether you are selling or buying any type of Santa Fe real estate, including homes, land, town homes, condominiums, ranches and commercial property. Here are recent reviews from my past clients about my know-how and service. Until you are ready to Sell or Buy Santa Fe real estate, why not dip into my site and learn more about Santa Fe. Or let's connect now or certainly learn more about each other on Linkedin or Facebook or Twitter

Emily Medvec Copyright  All Rights Reserved 2007-2023

Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Hello Emily and Great information to share with us here in the Rain.  Make it a great day!

Oct 27, 2022 09:11 AM
Michael Jacobs
Pasadena, CA
Pasadena And Southern California 818.516.4393

Hello Emily - well, luck can certainly play a part in some real estate transactions but I am "betting" that good fortune is headed in the direction of those who are well-prepared.  

Oct 27, 2022 09:38 AM
Emily Medvec

Michael Jacobs agree. Sometimes people have to have that "lucky" emotional mindset to then focus on being prepared. 

Oct 27, 2022 10:14 AM
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Good evening Emily,

I love your analogy to the movie but the clincher was when you explained: "If the home you could buy this year for $500,000, will cost you $550,000 next year and the mortgage rate goes up from 6.5% to 7.5%, the payment will go from $2,844 to $3,461 based on a 90% mortgage for 30-years." THAT SAYS IT ALL!

Oct 27, 2022 06:03 PM
Jerry Newman
Brown Realty, 210-789-4216, - San Antonio, TX
Texas REALTOR, San Antonio Military Relocation

Hello, Emily Medvec. I just loved that line from the Dirty Harry movie. Hopefully, after reading your post, buyers will get off the fence, and make the decision to buy now instead of waiting for the uncertainties of tomorrow.

Oct 28, 2022 11:14 AM
Emily Medvec

Hey, I feel lucky! Thank you Jerry Newman for this kind reblog!

Oct 28, 2022 12:36 PM
Patricia Feager, ABR,CRS,GRI,MRP
DFW FINE PROPERTIES - Flower Mound, TX
Selling Homes Changing Lives

Emily Medvec - Consumers can trust you to convey the correct information and explain how things work when it comes to purchasing a home and securing the right loan. 

Emily, your analogy is PERFECT! Speaking the truth and knowing the facts, like you do,  will increase consumer confidence. What a GREAT post!

Oct 31, 2022 04:28 AM
Kristin Johnston - REALTOR®
RE/MAX Platinum - Waukesha, WI
Giving Back With Each Home Sold!

Great information.   Thanks for sharing and enjoy your weekend!

Nov 04, 2022 06:57 AM
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

Hi Emily:

Lots of good information and data here to encourage buyers to think carefully about buying a home now, and of course in your area being in touch with you for expert guidance and counsel. The view has to be longterm!

Jeff

Nov 09, 2022 07:33 PM