About Jim Valentine’s Estate
The definition of market value is the amount willing buyers will pay and willing sellers will accept. What happens in the market when buyers still want to buy and sellers still want to sell? Very little can be done.
Rising interest rates started a market shift. The resulting inflation and rising cost of living made the situation even worse. Fuel prices have doubled, raising the price of just about everything we consume.
So even though interest rates are rising, purchasing power is declining, and the cost of almost everything we consume is rising, house prices have not fallen dramatically. In 2008 and the years that followed, the northern Nevada market fell 70%. A little off today, but not as believable as the media hype.
The median selling price per square foot is down 8% from last April. This was just a month before interest rate adjustments began, so for our purposes it was a good comparison. The median selling price has fallen more than that, but the selling price per square foot is a better reflection of market changes.
Seattle is one of the most dynamic markets in the US, and is currently down just 12%. High demand and low inventory. Why are you out of stock? There are normal high tides and high tides in the supply and demand market. People want to be promoted as their families grow and become more powerful buyers. Conversely, sellers reach a stage where they want to shrink in size.
The market has stalled for a while as people with 2.5-3% mortgages on their homes are unwilling to sell their homes and take out a 6% mortgage. They are waiting to see if interest rates go down. This contributed greatly to the serious inventory shortage. No one knows where the loans will go, but there are new government policies throwing new unnecessary sticks into the business cycle.
The new government-sponsored loan policy, which has been met with protests, came into effect this month. It provides subsidies for those with good credit and a cash down payment, and those without either or both. If you have good credit, a good down payment, and a traditional loan backed by Fannie Mae or Freddie Mac, you will be charged higher fees. Borrowers with lower credit scores and lower down payments are charged lower fees. It doesn’t make much sense to reward those who haven’t worked on their credit and savings and reward those who have worked hard on their personal financial endeavors, but this is a new program that went into effect May 1st. is.
We think we have a good idea about this market that no one has talked about before. What about a loan program that allows the lender to move the loan to the next property? In other words, just like moving furniture to a new home, the loan can be moved to the new home on the same terms.
Of course, you will have to be assessed and there will be a fee, but you can keep your interest rate and lender the same. It seems to me that this would allow the market to relax without compromising anyone.
Market variables have always been part of the real estate world. Learn how they affect you and your wishes and needs as a buyer or seller, so you can better plan your real estate investment. If you live in a house for 20, 30 years, you need one rule. If you’re looking at a five-year hold, there’s another set.
For most people, real estate is a long-term undertaking, not one that will end anytime soon. Even if you are not actively participating in today’s market, be sure to pay attention. Things are always changing and many of those changes will affect you at some point.
When choosing a professional to serve your real estate needs…experience is priceless! Jim Valentine, RE/MAX Realty Affiliates, 775-781-3704. dpwtigers@hotmail.com.
