Now
that the election is over and the dust has settled, there is a lot of pent up
demand out there after so many buyers (and sellers) had been waiting to see
what impact the Presidential election might have on things. Today, we are
seeing record numbers of sales across the country as well as continued low
interest rates.
But
now that things have calmed down from an election standpoint, the new buzzword
is “fiscal cliff”. So what exactly is this fiscal cliff and what impact does it
have on our housing industry?
For
starters, it is important to understand the factors at hand dealing with our
national financial picture in order to be able to see what lies ahead in terms
of the housing market. As we slowly approach the New Year there will be a lot
of issues at hand coming up. Among the things to consider that will impact our
economy are tax cuts for individuals, tax breaks for businesses that are set to
expire soon, plus the imposition of the 3.8% real estate tax to help support
Obamacare. Additionally, Congress is expected to implement spending cuts as pat
of the 2011 debt ceiling as well as the impending expiration of benefits for
Americans without jobs.
The estimate for
our Congressional budget remains at about $600 billion to be siphoned out of
our economy come next year leaving the very stark possibility of yet another
recession.
But
where does this leave us in terms of buying and selling homes? Despite this
uncertainty in our economy we are sure of one thing; interest rates will
continue to hover at historic lows – at least for the time being.
As
investors pull out of the stock market and focus their collective attention on
bonds, we will see low interest rates continuing to dominate our housing market
and even go a bit lower still. The one thing to be concerned with, however, is
how long this will last. We expect to see more inflation as the government
continues to mint money in an effort to keep the country out of a recession.
This move will of course impact interest rates as they mirror the direction
taken by inflation most of the time.
So
before mortgage rates are back up to the 6 or 7 percent range, now is the
chance for many homebuyers to embark on their real estate journey – before it’s
too late. Industry analysts are expecting that sometime between 2013 and 2014
we will start to see a rise in rates again. After several years of being
“spoiled” buyers will once again be back into reality, facing mortgage rates
that will end up adding several hundred dollars or more to each monthly
payment.
All
this points to now being one of the best times in the history of our housing
market to buy a home. We invite you to come into our office, meet with one of
our team members and see what we have to offer. We are confident that we will
be able to help you get the home of your dreams at less than market value!
Contact us via voice or text today at 916.529.5342 or email Thomas@thomasmarch.com today!
