On the groundhog front, in a rare case of unanimous agreement, Jimmy the
Groundhog in Sun Prairie, Wisconsin, Punxutawny Phil in Pennsylvania and Staten
Island Chuck all saw their shadows on Groundhog Day, indicating that we will
likely experience 6 more weeks of low temperatures. The interest rate forecast
however is quite different, with the chances of us enjoying 6 more weeks of low
rates becoming increasingly unlikely.
In another, also rare but unanimous agreement, the Federal Reserve Board at their January 29th meeting opted to cut back their bond purchases by another 10 billion per month, further dismantling the economic stimulus campaign it started a few years back. The feeling by the Fed is that the underlying strength in the broader economy continues to grow. How can such good news about the strength of the economy be bad news for home buyers? In short, fewer bond purchases by the Fed means increased interest rates on home loans for Buyers which in turn translates to increased competition between Buyers trying to get an accepted offer and an attractive loan locked in before the next rate increase.
Adding to the fervor is the seasonal increase in housing activity that takes place immediately following the Super Bowl. Using history as our guide, we have consistently seen that the national focus changes rapidly from, "Who had the best TV commercial?" to "How do we get moved into our new home before the end of May?" Listing activity increases dramatically as do things like Open House attendance and the number of homes likely to receive more than one offer at a time. The lack of available inventory, which is being seen in Madison as well as nationally, means Buyers are taking strong action fast and many Sellers whose homes were previously underwater for equity, are now seeing increased value along with some long overdue light at the end of the tunnel.
Our best advice right now? Buyers should get preapproved immediately and start the home search ASAP. Being familiar with market offerings and having your lender ready to act quickly will be key to helping you make an informed decision in a fast paced market. For home sellers, my advice is to call on me to prepare a market analysis of your home's value right now. Even valuations as old as 90 days may no longer be accurate given the current atmosphere of imbalanced supply and demand. The time is now. If 2014 is anything like 2013, and I expect it will be, the housing market will be HOT by mid-February. I'd be happy to answer any questions you may have and I'd be honored to have the opportunity to earn your trust and your business.
In another, also rare but unanimous agreement, the Federal Reserve Board at their January 29th meeting opted to cut back their bond purchases by another 10 billion per month, further dismantling the economic stimulus campaign it started a few years back. The feeling by the Fed is that the underlying strength in the broader economy continues to grow. How can such good news about the strength of the economy be bad news for home buyers? In short, fewer bond purchases by the Fed means increased interest rates on home loans for Buyers which in turn translates to increased competition between Buyers trying to get an accepted offer and an attractive loan locked in before the next rate increase.
Adding to the fervor is the seasonal increase in housing activity that takes place immediately following the Super Bowl. Using history as our guide, we have consistently seen that the national focus changes rapidly from, "Who had the best TV commercial?" to "How do we get moved into our new home before the end of May?" Listing activity increases dramatically as do things like Open House attendance and the number of homes likely to receive more than one offer at a time. The lack of available inventory, which is being seen in Madison as well as nationally, means Buyers are taking strong action fast and many Sellers whose homes were previously underwater for equity, are now seeing increased value along with some long overdue light at the end of the tunnel.
Our best advice right now? Buyers should get preapproved immediately and start the home search ASAP. Being familiar with market offerings and having your lender ready to act quickly will be key to helping you make an informed decision in a fast paced market. For home sellers, my advice is to call on me to prepare a market analysis of your home's value right now. Even valuations as old as 90 days may no longer be accurate given the current atmosphere of imbalanced supply and demand. The time is now. If 2014 is anything like 2013, and I expect it will be, the housing market will be HOT by mid-February. I'd be happy to answer any questions you may have and I'd be honored to have the opportunity to earn your trust and your business.
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