Mortgage Rates Inch Higher, Marin Buyers are Cautiously Stepping Up

I heard Carole Rodoni speak last week.   Carole is a very sharp real estate and economic expert,  a dynamic speaker, and has an uncanny ability to summarize where we are, how we got here, and where we are likely going from here in the real estate market. 

She summarized several new federal and state programs in the works that may temporarily provide a boost to the market, and will make short sales easier and probably more numerous.  There will also be programs that will provide relief to homeowners in trouble.   I will be sending a summary of these with links to my clients.

When the government stopped purchasing mortgage-backed securities last month, interest rates began edging up and buyers have started to scramble to go into contract.   Rodoni predicts that interest rates will inch up slowly, and they will not go over 6 percent for awhile.   Her big picture reminder to buyers is this:   we will continue to be in a favorable mortgage rate environment for a while.    M0rtgage interest is still dedictible, so a small increase will  provide a little more tax relief too.   In Carole Rodoni style, her message to buyers who start to back off because of an uptick in rates:   “Oh paleeez!  I bought my first home with an 18% interest rate!”

I’ve met many people waiting  for the absolute ‘bottom’ as far as real estate prices go.  Of course, they will  have to know it is the bottom before the numbers come out, so they’ll need to choose just the right moment to go into contract, and the extraordinarily low-priced home that is just perfect for them will be available, right then, too I guess!   During their incredibly timed escrow, that’s when the number of  sales increases, multiple offers become more common, everyone else’s prices start to go up.  It’s only then that the rest of the world realizes they’ve just missed the bottom ; )    Yes, we have seen an increase in the number of listings going into contract.   And yet there are still a lot of homes coming on the market with amazing prices.

My advice to my clients who are concerned about the market and whether it’s a good time to buy or sell is the same that it’s always been:  Focus on your own ‘big picture.’    Where will you be happy living?    Where can you live without financial stress?   Have you identified a home that is a good value?   Are you looking at locations that historically have increased in value?    Let go of the all-too-common need to feel that you gamed or ‘outsmarted’ the market.   The market trades where it is.   Marin real estate is like Apple stock.   It’s pricey, but it has real value — and in my opinion, the lifestyle here makes it worth paying higher prices.   Is Marin still over-priced?   Perhaps.  One could argue that Apple stock is too.  You can try going to Steve Jobs to explain to him why his stock should be trading at $100 per share rather than $200…but the stock market trades where it trades….and so does the real estate market.  Particularly here in Marin, where there are few buyers who ‘have’ to sell.