Listing Courtesy of OCEAN ATLANTIC SOTHEBY'S INTL REALTY
In case you set your alarm clock to go off when it was time to buy a home, that clang you may be hearing from somewhere in the distance could be it (figuratively speaking, of course). The reason has to do with the direction of Lewes mortgage rates (among others).
Now, I realize this could come across a little bit like Aesop’s boy who cried ‘Wolf’ since a year and a half ago the experts were unanimous in predicting that mortgage rates would rise throughout 2014 (to at least 5%, if I remember correctly). And not only did they not jump—after a short rise, they actually fell!
The experts were wrong. To the extent I agreed with their call, I was, too—but at least I wasn’t lonely. And I also try to be clear that predicting the future of any financial movement is never a sure thing. The same is true today…but…
Last week, less than a week after the Federal Reserve monetary policymakers emerged from their meeting, Bankrate web commentator Janna Herron published a view that sent alarm bells ringing in my head. It makes so much sense, I feel compelled to share it. Already publicized in the rest of the media was the announcement that 15 of the 17 Fed officials now agree that they expect to raise the federal funds rate at some point within the next 6 months (and one expert was quoted as expecting that as early as September or October). Fifteen out of 17 is a 88% majority, so it couldn’t get much clearer. The funds rate has been cemented to the ground at precisely zero for almost seven years. Since 2008.
Lewes mortgage rates are based upon that Fed funds rate. When it rises, mortgage rates have to rise, or lenders would have to be reclassified as charitable enterprises (not likely). The reasons given for the Fed governors’ near-unanimous prediction are both the rise in the pace of job gains and, as was reported, “The Fed also noted improvement in housing.”
Now, that news may have prompted Lewes mortgage-rate watchers to sit up and take notice—but not necessarily have them hearing alarm bells going off. But there were two other pieces of information:
· First, the current national mortgage rates reported last week rose. They were pegged at just over the 52-week average for 30-year fixed loans, but at 4.13% it remained below the 4.33% of a year before. In other words, still (perhaps momentarily) in the historically basement-level range.
· Second, new mortgage activity began to rise, moving 1.6% up from a week before. Applications had been dropping, but now they were on the move. This while home builder confidence levels soared, with expectations hitting the highest levels in nearly a decade.
As with any batch of economic numbers, the signs can be interpreted in multiple ways, but one way sure does seem to stand out: mortgage rates are attractive now, housing activity is almost certainly on the rise, and mortgage rates and monthly payments are very likely to become more expensive. The same thought may be occurring to more and more people as we enter the summer home-buying season: “What if I could pay less every month for the same home…for the next 30 years…”
Note to Lewes home-buyers. Listen carefully: that could be the sound of your own alarm bell going off! If you think you hear it, now would be a great time to give me a Call/Text me Russell Stucki at (302) 228-7871, email me at firstname.lastname@example.org, visit more listings at www.beachrealestatemarket.com
There are two kinds of situations that homeowners looking at Sussex County comparables run into:
1. THE SIMPLE COMPS: Your Sussex County home is part of an area that’s more uniform than not, in a neighborhood where there are a sufficient number of similar houses to have produced several sales recently. Your street may not be part of a literal development with models that have near-duplicate floor plans—but the area is, in general, homogenous. When it comes to selling your Sussex County home, you’re in luck!
2. THE NOT-SO-SIMPLE COMPS: AKA, the incomparable situation. Your area home is one of a kind, almost totally unlike any other in the neighborhood (two bedrooms, six-and-a-half baths) or unlike any other in any neighborhood (who else has a swimming pool built into the attic?). All right, maybe your house isn’t quite that weirdly incomparable, but it’s still the case that no similar home has sold within a 5-mile radius within the last year or two. When it comes to selling your Sussex County home, you may still be in luck—but not because of ‘the comps’!
When your property falls into the first category, one whole part of your selling situation becomes a piece of cake because of the comparables. Sussex County comparables from previous sales make the ultimate, convincing case that your home has at least $X value, because the market says so. In writing. Real people have plunked down their hard-earned dollars as proof. Even better, real banks have backed them up with their also very real dollars. It’s all verifiable in the public records.
When your property falls into the second category, in terms of the comparables for our town, it really doesn’t matter if you have the most attractive house or the best bells and whistles and bathroom renovations that will take a buyer’s breath away. If no other home within a reasonable distance has sold with a reasonable period (say, six months) that are close to the same size as yours, or if none has anything like similar features, you and your Realtor® are going to be pretty much on your own even settling on a listing price. Here’s a few lesser known reasons why paying attention to comparables is important when selling your home.
· Unique amenities won’t always guarantee a higher comparable value. If the amenities are unusual for Sussex County, it might make it that much more difficult to find enough comparables in your area to come up with a listing price.
· School districts factor heavily into value. You might have grumbled about paying school taxes if you aren’t sending your own children off to school, but the quality of the school district has a large influence on comparables.
· Scarcity of housing inventory in your neighborhood can be either an advantage or disadvantage. It’s a plus if the housing inventory is low due to high demand (there will be enough recent sales information to set an accurate listing price). It’s a negative if scarcity occurs because no one is buying nearby homes—and appraisers will find it more difficult to place a value on the property.
It’s my job to get your home the best offers in the shortest amount of time for either category of Sussex County comparables. Give me a call—regardless of which one yours falls into, we’ll discuss how we can produce results that are truly incomparable! Call/Text me Russell Stucki at (302) 228-7871, email me at email@example.com, visit more listings at www.beachrealestate.com.