This week a lot of people have been asking me if they should wait to buy or sell because interest rates are rising so rapidly. There is not a short answer for this question so let's try to break down some of scenarios that I see playing out. The obvious consideration here is that if interest rates continue to climb then it will price some buyers out of higher priced homes because their payments will be too high due to the difference in interest payment. Some people thought this would be a problem when trying to sell in the Bay Area but so far that has not been the case and demand is still as strong as ever. As I covered in last week's newsletter, rent prices are rising at the fastest pace in recent history, even up to 30% higher in some markets. This is getting more first time home buyers eager to get into a home, while demand from current home owners looking to trade up builds knowing this is their chance to make a move with rates still low.
Will there be places where prices might be lower or demand could slow down? The answer is yes, but it's not going to be in the Bay Area or anywhere with a strong and dynamic economy. An influx of professionals and skilled workers are still coming here due to our high paying job market and that will continue to push rents higher, renters into first time home buyers, and home owners into the property they really want to land in. My advice to buyers is to move quick while you can lock in a good interest rate and let me help you find the perfect property where you can start to build equity now! I really like this article that has different experts with their thoughts on upcoming changes...
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