Middle School Dance

In recent weeks, I have had several clients wondering if the rise in interest rates has had an impact on the robust Real Estate market of the last few months.  Are we in a slow down?  Is this the "Dog Days of Summer"?

The interest rate increase has done a few things to the marketplace.  First it has spurred on sellers who were on the fence about selling.  Inventory is up slightly on the near west side of Madison.

But it's done something else, too.  It has slowed the number of buyers searching.  There are fewer buyers looking at houses and they are being a little more particular than they were in March and April.

What's happening is sort of like the first middle school dance you attended.  Remember how the boys and girls would gather on opposite sides of the gym, with few venturing to the dance floor?  They were all waiting, to see what the "other side" did.  Those middle-schoolers would take an extra trip to the punch bowl, to survey the surroundings.  In the end though, the dance floor is full of happy people.

The same is true in the housing market.  The gym walls are lined with buyers and sellers, a little shy about the first step toward the other.  The rise in interest rates has made the move to the "dance floor" a little more tentative.

But interest rates are still at incredible levels.  And the dancers will meet in the middle.  It just may take a few more trips to the punch bowl to assess the situation.