Throughout history, markets and companies of all kinds have won and/or lost based on perception vs. their realities. Mortgage rates are still relatively low historically, at about 25% of their all-time highs reached at the end of the Carter administration and inherited by the Reagan administration. For most of our adult lives as ‘baby boomers’ we never imagined mortgage rates were even possible under 5%. Then comes the great recession of a decade ago and the prolonged artificially held down interest rates created and driven by the FED to stimulate and reinflate the economy.
While it is still too early to say whether those policies were wise in the long run, we got used to hearing rates quoted beginning with a 3, as in 3.5% as an example.
There are a number of people who bought during the great recession who could not afford or would not want to pay today’s current fair market value tied to a higher mortgage rate. Over time interest rate and mortgage payments treatments under the tax codes have also changed.
Deciding on what ‘fair market value’ is, the primary driving force continues to be ‘what a willing buyer and a willing seller will agree to’ and confirmed by the appraiser when a mortgage is involved. In most recent market cycles approx. 20-25% of all home sales are paid ‘all cash’.
How you chose to look at the market is your decision. I’d like to think of it as balancing out, allowing people to make informed, logical decisions, and for sellers and buyers to have opportunities to achieve their goals/objectives in many if not most instances.
What do you think? On this subject it is important to formulate a plan and have an opinion. As the stock market fluctuations could have a big positive outcome on housing as in the past, when the fall of ‘87 stock market correction, the Southern California housing market took off from a very aggressive stance to sizzling hot again. Not saying that will happen, but there is a lot of cash in the economy and over time mortgage rates are still within the range of reasonable, especially when you consider an adjustable option.
When it comes to real estate, not all companies are created equal. As Chairman of Hospitality Realty Corp. dba Realty Pro 100, Blake Vartanian has been very fortunate in his 37 yearlong real estate profession to have built two number “ 1 “ franchised locations for two separate global franchise companies.
Blake Vartanian, along with his wife, Joanne Vartanian (CEO and President), and their Executive Team; Mary Walters (Vice President/General Manager), Barbara Wayne (Broker of Record), and Zantine Greenwood (Chief Information Officer), Realty Pro 100 has the foundation to support your “hospitality focused” real estate experience through our dynamic sales team.