Thursday, June 29, 2006
How the Feds New Rate may Affect Cape Coral Real Estate
Later today the Federal Reserve will unveil its new rate.
How will this affect housing in SouthWest Florida and Cape
Coral real estate values?
It could go either way.
For instance, on Tuesday this week, the Florida Association of Realtors reported that
"Resales of homes in most Florida markets continued to slow in May, though
prices posted Double-Digit annual gains once more in many metro areas and
statewide." the Florida Association of Realtors reported Tuesday.
Nationally, home resales dipped for the third time in five months, with most of
the weakness in the Northeast, the National Association of Realtors said in a
separate report.
Although no one has a crystal ball, a small rate hike by the Feds would obviously
force out many low-end homebuyers looking to purchase anything in the $245,000
range and below.
But the opposite may be true for those mid to higher end buyers that have been
on the fence, waiting to see what the Fed will do.
If the rates rise, these buyers may swarm and purchase to lock in today's rate
before they continue to climb. We've already seen a 2 point rise in the past
12 months...who knows if that will stop or climb?
What's more, the fact is that we still have the lowest interest rates we've seen
since the 1960's. Remember what they were in the '80's?
Relative to the past 40 yrs, the rate is still advantageous. In just a few hours,
we'll see what the Feds do. Bottom line, regardless of what they choose, the law
of supply and demand is on our side in this market.
Best off all Florida real estate, Cape Coral, and SouthWest Florida continues to benefit
from consistent in-migration, and real estate values continue their annual
double digit growth.
How will this affect housing in SouthWest Florida and Cape
Coral real estate values?
It could go either way.
For instance, on Tuesday this week, the Florida Association of Realtors reported that
"Resales of homes in most Florida markets continued to slow in May, though
prices posted Double-Digit annual gains once more in many metro areas and
statewide." the Florida Association of Realtors reported Tuesday.
Nationally, home resales dipped for the third time in five months, with most of
the weakness in the Northeast, the National Association of Realtors said in a
separate report.
Although no one has a crystal ball, a small rate hike by the Feds would obviously
force out many low-end homebuyers looking to purchase anything in the $245,000
range and below.
But the opposite may be true for those mid to higher end buyers that have been
on the fence, waiting to see what the Fed will do.
If the rates rise, these buyers may swarm and purchase to lock in today's rate
before they continue to climb. We've already seen a 2 point rise in the past
12 months...who knows if that will stop or climb?
What's more, the fact is that we still have the lowest interest rates we've seen
since the 1960's. Remember what they were in the '80's?
Relative to the past 40 yrs, the rate is still advantageous. In just a few hours,
we'll see what the Feds do. Bottom line, regardless of what they choose, the law
of supply and demand is on our side in this market.
Best off all Florida real estate, Cape Coral, and SouthWest Florida continues to benefit
from consistent in-migration, and real estate values continue their annual
double digit growth.
