The FED is meeting at the end of July 2018. The rumor is, as it seems always to be, that the interest rates will be raised.
They were earlier this year and it did not put real estate back on its heels for long. However, it did cause the slow down by real estate sellers in the listing of the real estate they have wanted to sell.
This was due to the average home seller in the Santa Clarita Valley needing to buy another home during the same transaction.
Most of the home sellers are either moving up, downsizing or making a sideways move to another local area with better proximity or out of state.
In any of these cases, the Santa Clarita home seller’s of today refinanced when the interest rates were in the low to mid 3’s.
This has been creating a slowness when these Santa Clarita – Valencia CA home sellers are contemplating placing their homes onto the market.
The home buyers, however, have been active, even with the lacking homes for sale. Those home buyers that are within the “Santa Clarita real estate sweet spot”, have suffered most.
The sweet spot in Santa Clarita housing is the Single Family Residence priced between $450k and $650k. If you have a home for sale within those two numbers in the Santa Clarita – Valencia CA cities, and if it’s priced right, you are only on the market for hours.
And depending on your strategy, you may not even wait over the weekend to entertain other potential offers, JIC the home buyer you had first is the best.
Is it guaranteed that the rates are going to be increased? No, it is not. Although every “so-called expert” is stating that they are and are probably placing bets with anyone who will gamble.
The local housing market is tighter today than it has been during the past couple of months. We have seen an increase in real estate inventory, but that has also brought a home buyer increase.
“They want to get locked before the rates increase”, said Paris MacIvor when I spoke with her earlier today.
“I have been seeing the same with the increase of phone calls and facebook inquiries by potential home sellers wanting to get locked with a home purchase before the rates.” The issue will be, and I’m paraphrasing, is that those home sellers need a home buyer who has been accepted. Then that homeowner has to find a home and home seller who will agree to have that buyer contingent on their home seller and closing concurrently.
It can work – even up to 24-48hours before the FED meets – but it will take a Realtor that is extremely committed and who has a Team in place to attempt such a feat. Especially if they have multiple sellers and multiple buyers who are demanding their service due to reputation or past experience.
The home seller needs to get their home in escrow with a home buyer. Then they have to find a residence they want to buy. They have to have the offer written and it will be contingent (in most cases) on their home successfully navigating escrow. However, they just have to get their rate locked and to do that they need to provide an executed contract to their real estate lender.
Or the real estate lender can lock the rate with some risk before they get into contract. However, this costs money. If the rate lock expires, it can be renewed, but for money that the lender won’t pay(in most cases), and the home buyer won’t want to pay(in most cases).
Exceptions always exist. I know this having been representing both home buyers and sellers in the Santa Clarita and Los Angeles Areas since 1998. I’m Connor with HONOR and I’m glad to be at your service with everything that is real estate. Please reach out to my team and me to be taken great care of.