Like the stock market, in real estate, there’s good and bad news to be found on any given day.
Here is some news that isn’t necessarily bad, though it might seem that way for the uncertain: Every single mortgage broker, banker, and financial planner that I know is advising that mortgage interest rates are going to hit 6%, or possibly even higher. This is a no-brainer because there’s really only one way for rates to go (which is up). We’ve been very, very spoiled with interest rates for about the last eight years now, as they’ve been ridiculously low.
Buyers who are looking to make a home purchase but are currently on the fence should get in touch with me as soon as possible—higher interest rates mean more interest costs on your mortgage loan. Generally, higher rates mean less buying power, so the higher the rate, the less home you’ll be able to afford. By waiting, homes that are available right now might not be within your reach if rates go up higher.
Higher interest rates also mean that sellers might not be that apt to put their home on the market, meaning that there will be less inventory. If they’ve got a locked-in 4% rate, they’re not going to jump at a 6% or 6.5%.
The good news is that tech companies are blowing up the Valley of Sun. Companies like Intel, American Express, eBay, Uber, Shutterfly, and Infusionsoft all have something in common: They’re either expanding or relocating their entire company here to the Valley. Every day, at least 202 are moving to Maricopa County.
An analysis that was conducted by ranking the future job-growth projections of 182 cities in the United States came up with this top five list:
- Chandler, Arizona
- Scottsdale, Arizona
- San Francisco, California
- Peoria, Arizona
- Gilbert, Arizona
That’s right! Four of the top five cities for growth are located right here in Maricopa County. And, according to research done by Zillow, Phoenix, Denver, Washington, D.C., Atlanta, Las Vegas, and San Jose will outperform the rest of the United States in 2019.
The bottom line is that we are currently living in the strongest economy in the U.S., and we don’t expect that to change for a while. We have seen steep appreciation over the past eight years, so I understand people’s reluctance to act in the market. However, we believe that appreciation will slow down as inventory increases and rates rise. Overall, we are headed toward a more balanced market, which is a good thing.
I hope that this information has been insightful to you. If you’re thinking of buying, selling, or investing in real estate, you only need to reach out to us. Either myself or Kristin would be happy to help.