Mahina and I recently had the pleasure of attending an economic lecture by Dr. Aleman, the senior economist for Wells Fargo. Being a realtor, I am always interested in seeing what our future has in store for us. Dr. Aleman states that we have been in a low interest rate economy for 7 years now. As we have all been hearing, he is predicting that interest rates are going up. Yes, he has been saying this for 4 years, but he says that the Feds are to raise their rates .25 in September and then another .25 in December. So there is a possibility our interest rates could go up by .5 by the end of this year. I wonder if he will be right?
Signs of Stable Economic Growth
Mr. Aleman goes on to state that we are in a very good time for real estate. We are not expected to have any kind of recession for about 3 more years. The U.S. economy, in history, has a recession usually every 5 years. We are currently 7 years in since our last recession.
One reason he states is that the U.S. economy has been having a slow growth of 2 to 2.5%. Slow growth is good according to him because during slow growth we are stable and don’t have a recession. Every time we had a recession we had very strong growth prior to that. He predicts that next year will be the first time we reach 3% growth rate since the great depression.
Another sign that our economy is doing is good is that we have strong job growth. Currently, we are in the longest stretch for growing jobs in U.S. history. Work is recovering in the State and Government sectors.
Mortgage lending is picking up again, which is great as when mortgages are picking up, buyers are buying and home prices are going up. According to the National Association of Realtor’s Chief Economist Lawrence Yun, he states that “low inventory levels in many markets” are leading to “reduced choices” at higher price points. There needs to be a significant influx of inventory into the market before anything will change.
So What Does This Mean To Buyers?
There is a lot of competition out there right now for your dream home. Prices are going to continue to climb, act now before you are priced out of your future home.
What Does This Mean to Sellers?
If you are on the fence about listing your home for sale and debating whether now is the time to move on with your plans of relocating… don’t wait!
There are more buyers that are ready, willing, and able to buy their first, second, third, vacation, or investment property now than there has been in years! The supply of homes for sale is not keeping up with the demand of these buyers.
Listing your home for sale now will give you the most exposure to buyers and the best sales price.
Whether you are planning on buying or selling a house this year, waiting to act no longer makes sense.