Buy/Sell Now or Wait?
With the November election finally(!) on the horizon, at least some Buyers and Sellers are trying to decide whether market conditions — and by market conditions, most observers mean interest rates — will be more or less favorable once U.S. voters have spoken.
The dilemma: whether to act now or wait.
Here’s my take:
Sellers: at least in the Twin Cities, conditions this Summer have seldom been so favorable: historically low interest rates (still), a good local economy, and — best of all — an ongoing inventory shortage (= fewer homes competing for Buyers’ attention).
Bottom line: any Sellers waiting for even better conditions are likely to be disappointed.
Buyers: the flip side of the coin. At least at lower price points, limited inventory means fewer choices and firmer prices.
However, assuming that most Buyers finance most of their purchase, rock-bottom interest rates mean that what Realtors and economists call housing affordability is still very good.
Should Buyers act now before rates rise after the election?
High(er) Interest Rates: How Big a Risk?
While lots of industry observers are warning of that risk, personally I don’t see it.
Each time the Federal Reserve has previously signaled the end of zero percent interest rates, the markets have reacted badly.
In turn, the Fed has reacted to the markets’ negative reaction by almost immediately backing off.
I see that dynamic continuing, at least until something (the proverbial black swan?) disrupts it.
As market wags like to say, “the trend is your friend . . . until the bend.“