After a busy two weeks, I finally have time to sit down and share my thoughts on the market. I feel like the financial news is moving at warp speed as the analysis of the real estate market, mortgage rates, and the Biden Administration's proposed tax plan is scrutinized.
My take on the market this week in our area is the same as it has been for awhile now. We haven't seen a serious dip in demand and our inventory remains drastically low. One point--which has been clear throughout all of this--is that even in the frenzy to find a house, buyers won't overpay out of the gate. A number of properties came on in Wellesley that seemed priced too high, and in turn didn't sell. The overpaying seems to come when:
  • A reasonable to low price is put out there for the desired property
  • Buyers’ emotions run high in the bidding process, which ultimately pushes buyers to pay more
If a sellers' price is too high to begin with, they should not expect a bidding war. Even in these times, people want to feel like they are getting a decent value and if they pay too much, they'll take ownership of that decision. There’s definitely a psychological element to this, which is what makes it all the more interesting.
Mortgage rates inched up last week and applications were down nationally, but that's in part because less people refinanced with slightly higher rates. That said, a client was able to get 2.75% on a jumbo loan with no points this week! I am so happy for them. That is almost 3 points lower than what they were planning on. It pays to shop around!
Finally, out of Washington, the White House is proposing tax changes, especially for real estate investors, which always interests me. While I am not making a statement politically, this article can help educate you on what could be ahead if these changes occur.
It was announced this week that travel to Europe could open up for people who are vaccinated. I see this as a potential to slow down the demand somewhat on the housing front. People have not been spending as much money on travel or other big ticket items as they did before the pandemic, and they are able to push that savings into housing. Perhaps now though, they will want to reserve funds for other things besides their house and home improvement. That could help balance things slightly come the summer. We shall see.
Have a great week!