Is the increase in interest rates affecting the real estate market for sellers and buyers?

Interest rates are affecting the market. They have increased about 1% over the last 12 months; however, I really don’t think interest rates are the only factor contributing to our change in the market.  Specifically the change has been that sales are down 18% between mid 2012 and mid 2013.

What are the other contributing factors?

The two other primary factors that are contributing to the slowing in the market place are:
1.    Lack of inventory: We are simply not seeing as many homes on the market and that is because the foreclosures and short sales have almost entirely disappeared, where two years ago it was almost 50% of our sales. However, the additional $40,000 in price reflects only an additional $23 per month in today's interest rates.
2.    Appreciation: Entry-level homes have gone up by about 20% in the last six months. Our average sales prices have risen from $249,000 to $289,000.

So when you analyze those three factors affecting the market, the lack of inventory is the most impacting. We simply have fewer homes to sell than ever before. As a matter of fact we have less inventory to sell than we have in the past 15 years. So, sellers we need you now!

So if you know someone who wants to sell, give me a call. I’d be happy to give you a free market analysis; you might be surprised how much your home is worth in today’s market.

Thanks for watching!