Mortgage rates & current real estate market

It looks like mortgage rates are pretty good right now, at least better than the last time I shopped around in the fall of 2002 when we built our current home.

Given the current real estate market and economic times, do you see rates falling much lower by early summer? We'll be ready to buy a house out of state (PA) in June, and we're starting to get an idea of what's out there now at some of the area banks.

Given the current real estate market, we're also toying with the idea of listing our house now, just to get it out there for people to see, but putting a possession date of June 1. I'm not sure how long it will really take to sell, since I've known people who have recently sold their houses in less than two weeks and others who are still trying after two years.

Andy ,
I think a lot of the question about putting your house on the market now depends on two things .

1 . How bad is the real estate market in your area ? Are home prices falling ?
2. How many other homes are currently "on the market" in your area ? If the market is flooded with "Good Buys" ,You may be required to lower your asking price to sell it .Are you prepared to do that ?

In our area, housing prices are continueing to fall which equals "a bad time to sell our home" . The US housing market needs to correct itself from inflated prices and this will take awhile . Hopefully by the 3rd quarter of this year .

I believe we will see another interest drop on Real Estate Loans before this is over . I predict 1/2% or more . This will be a great time to purchase a home if your in position to do that .
Good Luck !

AndyM said:

I'm not sure how long it will really take to sell, since I've known people who have recently sold their houses in less than two weeks and others who are still trying after two years.

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Real estate is, in many ways, like a game of chess.

Al made some good points, but let me toss out some other things to think about. When I sold my first house I looked around at all the other similar homes in the area (about a 16 block radius). I also looked at the prices. I found a few homes that had the same floorplan as my house (the neighborhood was a post-WWII development with many very similar homes). At the time (14 years ago) prices were right around $100,000 to $110,000 for these homes (roughly 1300 square feet, small suburban lots) and the typical house sat on the market for 5 to 6 months, then sold for $95,000 to $105,000.

I priced my house at $98,500. Sold it in 1 week for my asking price. It could be argued I underpriced my house. What I did was price it so that nobody would seriously consider the other similar houses, and I sold it quickly so I eliminated paying interest, utility bills, property taxes, etc. In my simple little mind, I did better than any other scenario I could come up with.

My brother in law is trying to sell his parent's home. He priced the house about $50,000 ABOVE the market (from what I can see). The house is sitting and getting very few viewers. Been on the market for about 2 years. They've lowered the price a couple times. Changed agents a couple times. Looking for a pot of gold. Funny thing is they are in a growing real estate market where there should not be a lot of trouble selling the house.

I used to dabble in real estate. One thing I learned pretty quickly was that overpriced homes sit for long periods of time and sell for less than comparable homes that are properly priced.

I believe mortgages are tied more to bonds than inter-bank rates. It may take a while to catch up to the drop, but mortgage rates should come down.

If you have stellar credit, may be the time to refi shortly.

waybomb said:

If you have stellar credit, may be the time to refi shortly.

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Hmmm, I pondered it but don't think so.
How much of a change do you think you need to make it worthwhile? 1%, 1.5%?
I'm at 4 7/8 now so I don't think it'll dip low enough for me to take advantage.

Brian, I doubt rates will fall low enough to do you any good.

Andy, they might fall enough to do you some good - go ahead and list any time, the worst that happens is it's still for sale come June, right?

rumor has it that the Fed will drop their rate 1/2% at the end of this week, so mortgage rates should drop a bit more over the next couple of months.

The Mrs is a Loan Officer for a major lender. She has product with a fixed rate of 5 1/2% for 30 years. I don't Think there will be much of a change in the rates themselves beyond what we've seen. The program guidelines have changed with regard to the borrowers obligation mostly. The lenders are requiring greater monetary participation (down payment) higher qualifying credit scores, increased documentation and such. Yes, it is a good time for buyers if you meet the requirements. Like Al and Bob said, knowing your market is key to making any decision about putting it up for sale. This affects your choice of realtor, if your gonna use one. We went thru 3 realtors to find the right one to work thru the market conditions efectively to sell ours. Took 2 years. Setting a date is fine except that it may become a moot point if it's June and the house hasn't sold. Are you in a position to buy despite not having sold? Ours being empty made a difference. We were able to close in just under two weeks and the buyers were needing in ASAP.

Good luck with what ever you decide.

BigAl said:

2. How many other homes are currently "on the market" in your area ? If the market is flooded with "Good Buys" ,You may be required to lower your asking price to sell it .Are you prepared to do that ?

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The number of houses for sale in the neighborhood seems to be constant, with variable turnover. Some sell quickly, while others have been on the market for a couple years. I've been watching the prices of similar houses in the area for a while and they seem consistent.

I've got the best of everything here--
3.6 acre treed lot, a city block from the lake, and within walking distance of businesses (restaurants, bank, post office, pharmacy, etc). Many of the houses are on city lots, but some of those are either lakefront or have docks.

I'm going to check with my realtor friend around the corner about how soon to list the house. She's said the same thing in the past to me that I've noted above-- some houses here sell in a week and some take much much longer.

I do have a little fudge factor in the price if needed, but I'm going to start around the price of similar properties in the area. The good news is I don't HAVE to be in a hurry to sell. I can keep commuting an hour each way to work for now and see if I can get the price I would like to sell it for.