I am going to steer clear of any politics or real estate predictions here; we will save that for the Thanksgiving dinner table. I am only sharing what we at The Savory Group are personally experiencing in the trenches of the real estate marketplace when we are working with buyers and sellers today.
The number of transactions taking place has declined dramatically from the market we just experienced with low interest rates. There seems to be a bit of a standoff between buyers and sellers.
We are seeing more owners opt for renting out their properties vs selling. The request for property management services has soared. In some scenarios the rental income that exceeds the monthly payment on an owners low interest rate mortgages helps off-set the increased payment on the replacement property. Property owners with interest rates around 3.5% are holding onto those mortgages as long as possible. We hear things right now like “date the rate, marry the house” but it appears many property owners are already married to a mortgage and they are in love with that low rate.
Our team talked about this with our clients when we were selling properties at the low fixed rates of 2.5% - 4%, we often said “You are buying the mortgage - it’s a hedge against inflation”. We had no idea how high inflation would run or how much the property values were going to climb in the last 2.5 years, and we don’t know when we will see the market balance itself out, but what we do know is that we have sellers that need to sell for one reason or another and buyers that want to buy and with creative tools from our lending partners we are continuing to make it work for both buyers and sellers. One of our recent closings got a 3.625% interest PERMANENT rate on a 30-year fixed rate mortgage with zero points!! As of today that program is still available and we are happy to share the details of this program with our colleagues and clients - just email us for details.
[email protected] with “Low Rate” in the subject line.
