Bubble, bubble, toil and trouble! There’s no doubt that the real estate marketplace is settling down from its breakneck pace of the last few years. There’s also speculation that the real estate “bubble” is going to burst, but it’s nearer the truth to say that the most overheated markets are losing steam, while other markets are reasonably readjusting.
The biggest worry swirling around the whole issue relates to mortgage interest rates, and whether we’re looking at 7% rates on the horizon. Before anyone begins to panic, however, it’s useful to reflect on history. During the last thirty-four years, interest rates were lower than today only four times. To review, rates were 6.79% in 1998, 5.92% in 2003, and 5.71% in 2004 and again in 2005.
The average interest rate in the 1990’s was 9.8%, and in the 1980’s it averaged 12.62%! Double-digit loan rates were common in the seventies and eighties. It should be pretty clear by now that real estate markets everywhere will find a way to survive interest rates rising to 7%!
Buyers have always been plentiful, and will continue to be. Buyers will still compete for homes, but the most attractive homes will be those which the sellers present in great condition and at a fair price. Consult a professional to outline your no-nonsense approach to selling in a cooling market.
