Those people who have been sitting on the fence regarding the purchase of some real estate may want to consider the factors that may move interest rates or home prices higher in the near future.
- The Federal Reserve is considering a “taper” of their bond buying activities. For the past five years the Fed has been pursuing a policy of low interest rates. Ben Bernanke has indicated that the Fed’s bond purchasing to keep rates low will end when certain criteria on employment and inflation are met. We are close to those numbers. When the Fed stops buying rates will go up because of supply and demand (ie. fewer buyers, same supply), rates will rise to attract buyers.
- Housing prices have been going up. Core-Logic estimates that, nationally, home prices have risen 12% in the past year. The inventory in Steamboat has been shrinking and prices are rising. Land Title Guarantee Company reports that home prices in Steamboat are up 18% in the past year and the number of transactions is up 12%.
- The Dodd-Frank Wall Street Reform and Consumer Protection Act goes into effect on January 1. According to Inman News, a real estate news clearing house, the net effect of the law as it applies to agents, brokers and buyers, is that:
a. There will be fewer loan choices as community banks and credit unions are squeezed out of the market making it harder for many borrowers to qualify
b. The loan process will take longer due to increased compliance
c. It will be more difficult and costly to obtain a loan in the future
So, if you are one of those on the fence with regard to buying real estate in Steamboat, think these things over and give us a call at 970-846-5138.