The Federal Reserve has indicated that there will be a gradual rise in rates throughout 2015 and into next year. Here's a quick summary of what that means for buyers and sellers:
For buyers - Always the good news first! An increase in rates will deter other buyers from borrowing money, so you will have less competition and a better chance of avoiding a bidding war. Now for the bad news - while the trend of bidding wars and over-ask offers will wane, the increased rate will cost you far more over time. So, if you've been wanting to buy in Boston but have been waiting until the supply-demand variance evens out, it might not be worth it. Long story short, rates aren't going down for quite some time, and it also doesn't seem likely that there will be a surplus of new (non-luxury) homes in Boston in the foreseeable future. So, now is a great time to secure a low rate and lock something down, especially if you fall into the 42% of millennials that Zillow's Chief Economist Dr. Stan Humphries says will be buying a home in the next one to five years.
What it means for sellers: There are way too few condos and single-family homes to meet the current demand, which is an ideal situation for sellers, but the rate increase means that the number of buyers will be decreasing throughout the year. This will mean fewer bidding wars and fewer over-ask bids, and more buyers deciding to keep renting. So if you've been on the fence about selling your home, now is the time to get top dollar by tapping into the large market of buyers that low interest rates have created.
The real estate market in Boston has gotten a lot of attention lately, as it is quickly becoming one of the most desirable cities in the country to live and invest in. Whether you're buying or selling (and then buying again) now is the time to gather information and resources that will ensure you're making smart decisions about your real estate investment.
For more information about the trends we're seeing in the Boston real estate market and what impact they will have on both buyers and sellers, reach out to our experts at 617-236-0353 or meet our team online.