Just as I was finishing my market update, the latest news that has the potential to change one of the driving forces, if not the driving force, affecting real estate activity in our region and the country as a whole comes along. It happened. As of 15 minutes ago (currently 2:15 p.m. on Wednesday, Dec. 13), the Federal Reserve announced that inflation is slowing faster than expected and that a rate cut could occur next year (2024). It was announced that it was expensive. The benchmark federal funds rate.
It has been widely discussed wherever real estate news is found, especially in this column, that rapidly rising interest rates are causing many would-be sellers to stay in their current homes. . After all, how can you justify giving up your current 3% mortgage rate and being forced to pay nearly 8% on the new home you eventually buy? This phenomenon is known as “golden handcuffs.” is the cause of the lack of housing on the market, everyone speculates.
As the year draws to a close, data shows that this very tough market continues, with homes appearing and going under contract almost immediately, and in many cases with multiple offers above asking price. Masu. Any discussion of what changes are expected to occur six to eight weeks from now, when the spring market opens, will need to reflect the impact of lower interest rates. Are interest rates really such a driving force? Is it possible that even if interest rates drop, many sellers will choose to stay put for reasons we don’t think about? Perhaps the world has changed forever due to the coronavirus, and once-in-a-lifetime events are changing every few months. This may be why people are less willing to move around because it seems to be happening more often than not. This slows down the pace at which families move in and out of neighborhoods. Many eager buyers who have been forced to sit on the sidelines will want to see reluctant sellers finally put their homes on the market due to low interest rates.
As of today, for whatever reason, the market remains very stable, with homes coming on the market little by little and leaving the market almost immediately. We will be watching closely to see if this late breaking news has any impact.
Nechama Polak is the broker of record and owner of V&N Group LLC, located at 1401 Palisade Avenue in Teaneck.Please send your thoughts and comments to [email protected] Or call us at 201.826.8809.