Today the Federal Reserve raised US interest rates .25% But what does that mean for buyers? Or sellers? Like it or not, it means the economy is growing and strengthening. This is only the second spike of interest rates in the last decade, with the previous hike about a year ago leaving minimal impact to the amount of buyers and home prices. Listing prices will more than likely see minimal change with equity continuing to climb in this sellers market.
Why is this sellers market happening and for how long? Well…as for how long, your guess is as good as anyone. Sellers markets happen when there are more buyers then homes. With interest rates still considerably low from an all out perspective and mortgages being easier to obtain, that creates more buyers. Also with the market crashing in 06, you essentially lost out on an era of first time home buyers whom are currently hitting the market again, creating 2 generations of first time home buyers shopping the market together.
So like, is the market going to have another 06 like crash? No, the market will always fluctuate up and down, from a buyers market to a sellers market. In the words of Tupac, that’s just the way it is. The difference between now and 06, aside from different programs and a decrease of ARM mortgages is that people are starting to see the best investment option as real estate. In a good market you are gaining equity in properties which is one mindset of investing. In a market that has you losing equity in your properties you also tend to see less buyers out there, which typically means more people are renting and all your rental properties will be filled. Hopefully at least. Point in case, whether you are leasing out properties, flipping or gaining equity. The real estate market has many ways to be profitable.
Take that, stock market.
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