Mortgage interest rates have already risen by over a quarter of a percentage point in 2018. Many are projecting that rates could increase to 5% by the end of the year.
What impact will rising rates have on house values?
Many quickly jump to the conclusion that an increase in mortgage rates will have a detrimental impact on real estate prices as fewer buyers will be able to qualify for a loan. This seems logical; if there is less demand for housing then prices will drop.
However, in a good economy, rising mortgage rates increase demand as many prospective purchasers immediately jump off the fence to guarantee they get the lower rate.
Let’s look at home prices the last four times mortgage rates increased dramatically.
In each case, home prices APPRECIATED and did not depreciate. No one is projecting as dramatic an increase in rates as the examples above. Most are projecting an increase of approximately 1% by the end of the year.
The last time mortgage rates increased by 1% over a twelve-month period was January 2013 (3.41%) to January 2014 (4.43%). What happened to house prices during that span? They appreciated by 9.8%.
Just two weeks ago, Rick Palacios Jr., Director of Research at John Burns Real Estate Consulting explained:
“Mortgage rates have risen 1% or more ten times in the last 43 years, with little impact on home sales and prices when the economy was also strong…Historically, rising confidence, solid job growth, and higher wages have more than offset reduced demand for housing resulting from higher mortgage rates.”
When mortgage rates increase, history has shown that prices appreciate (and do not depreciate) during that same time span. Call The Ransom-McKenzie Team to talk about purchasing your perfect home.
Have you seen the twinkling lights on the new marquee at the corner of the Fox Theater’s parking lot? The words “Food Lab” gives a hint about what is happening inside the space at Market and 6th Streets in Downtown Riverside. The marquee’s message states that the Riverside Food Lab (RFL) is preparing to open in the Spring of 2018.
RFL is one of many unique developments from Arteco Partners, a Pomona based, innovative “re-developer” specializing in the “adaptive-reuse of historic structures and in-fill development in mixed-use downtown neighborhoods.” While this building is a newer structure, it is in the heart of the historic downtown.
The Riverside Food Lab concept is a communal food hall with 14 artisanal eateries and bars. Arteco’s President and co-founder Jerry Tessier is excited to bring this idea to Riverside.
“Downtown Riverside, given all the current and planned developments – from the Fox Performing Arts Center to the coming Imperial Hardware Lofts project — is the right venue for this type of niche development. And with the 14 different eateries and bars inside the Riverside Food Lab, you can go with a group of people or you can even just go on a date, and you don’t have to decide what you’re eating before you get there.” – Jerry Tessier
Start your morning with coffee from Augies and end the day with craft beers at Beer Farm. In between there’s ramen, raw juice, creole, BBQ, acai bowls, waffle treats, “Chicano style” Mexican, Lebanese, and wood fired pizzas. These are just the first 11 vendors to join the RFL family.
Besides local food vendors, the RFL plans on local artists creating murals for the walls, and will bring live music and special events to the adjacent patios adding flavor and color to the festivals and events already taking place in our City of Arts and Innovation.
Excitement is growing – stay tuned as more vendors join RFL by ‘liking’ them on Facebook, or visit their website at riversidefoodlab.com.
We love letting our friends and clients know about things going on in and around Riverside. Subscribe to our blog, and visit our webpage at RansomMcKenzieTeam.com to keep in touch!
Our clients often ask us whether staging a home is an important part of getting their home sold quickly. It can be. A well staged home does make a difference.
Staging is not just referring to putting furniture into a vacant home. It also refers to what we ask our sellers to do when preparing their home for sale. One of the most basic, yet effective staging strategies is decluttering the home. This could include everything from cleaning out closets to moving out furniture that makes a room look too small. Other staging game plans could include more extreme measures such as replacing carpet, painting or even replacing kitchen counter tops.
According to recently released data from the National Association of Realtors (NAR), the median amount of time a home spent on the market hit an all-time low of only three weeks in 2017. In Riverside this number is under 20 days in some neighborhoods.
Strong buyer demand, a good economy, and a low inventory of new and existing homes for sale created the perfect storm to accelerate the time between listing and signing a contract. The time needed to sell a home has dropped substantially since its highest mark of 11 weeks in 2012.
The chart below shows the median weeks on the market from 1987 to today.
If you are a homeowner who is debating whether or not to list your home for sale, know that national market conditions are primed for a quick turnaround! Give The Ransom-McKenzie Team a call today to get a free property value report. We would love to help you sell your home.
We love spending time in the kitchen with family and friends. Never is this more special than during the holidays. Our holiday traditions include a number of favorite cookies and sweets that come out only during the holidays. Our Christmas cookies are made every year, just as they have been since Charlotte and her sister Leslie were kids.
Multi-Generational homes are coming back in a big way! In the 1950s, about 21%, or 32.2 million Americans shared a roof with their grown children or parents. According to an article by Realtor.com, “Nearly 1 in 5 Americans is now living in a multi generational household – a household with two or more adult generations, or grandparents living with grandchildren – a level that hasn’t been seen in the U.S. since 1950.”
Whether you are buying or selling a home, it can be quite an adventurous journey. This is why you need an experienced real estate professional to guide you on the path to your ultimate goal. In this world of instant gratification and internet searches, many sellers think that they can For Sale by Owner or FSBO.
The 5 reasons you NEED a real estate professional in your corner haven’t changed, but have rather been strengthened by the projections of higher mortgage interest rates & home prices as the market continues to pick up steam. Read More
The American Dream of home ownership is alive and well. Recent reports show that the US home ownership rate has rebounded from recent lows and is headed in the right direction. The personal reasons to own differ for each buyer, but there are many basic similarities.
The benefits to home ownership are numerous and varied. Today we want to talk about the top 5 financial reasons you should own your own home. Read More