July Market Alert: Can You Afford to Wait?

You've seen the headlines on all the major networks, cable shows and newspapers:  Interest Rates are rising! Inventory is low!  Prices are increasing!

If you are waiting to list your house, you should understand what these factors mean to you and armed with this knowledge you may need to move quickly.  

As interest rates rise, buyers may not be able to afford homes at the same price point they were considering at lower rates and as sellers you will lose a segment of the market.  Here's what rising interest rates mean to you as sellers, and what buyers are facing:  

A 1% increase in interest rates is huge.  For example, on a $417,000 mortgage (a conventional mortgage),  a 3 ½ % mortgage payment is $1,871.  Applying a 4 ½ % interest rate to the same mortgage increases the payment to $2,111. That's a $240/month increase for the  buyer, essentially increasing the cost of the house by $53,000!   So if you are waiting to sell, you need to consider what in turn you will be buying: Will the cost of that purchase increase to the point where you can't afford it?

Another factor at play is that buyers are eager to purchase. People want to own; they want a piece of the American Dream of home-ownership.  Due to lower inventory, I have buyers lined up looking at houses!  Some of the low inventory is due to pent-up buyer demand in the first quarter of the year.  Many sellers were waiting on the sidelines for a sign of a recovery and when they saw it they jumped into the market.  It's my opinion that people who "have to sell", have their homes on the market and people who are "not ready" simply don't realize that the time to sell is now. 

The media is playing up the fact that housing prices are increasing, but that is a national trend. We are not seeing those huge increases here in Westchester, certainly not the 12% national average. Westchester housing prices are increasing  more along the lines of 5%, based on stats from the Hudson Gateway Association of Realtors, which released its second quarter home sales report on Monday.  This slower than average increase means you need to be realistic on pricing and if you are, you will see a faster turnaround.

As always, please feel free to pick up the phone and call me (914-721-0038) if you have any questions on the current real estate market.  I am here to serve your real estate needs in any way.  

Michael J. Marciano, SRS, Licensed Associate Broker NY & CT

Keller Williams NY Realty  WestchesterHouses4Sale