My new slogan ... The real estate agent that fights for his clients! Okay, I do go to battle for my clients, but not literally! Let me explain.
Over the past year, I have been finding as many ways as possible to keep the boys outside. When the weather got warm a few months ago, we started going to skateboard parks. Trying to relive my teenage years, I bought myself a board. On Mother’s Day while showing my nephews I’m cool, I jumped on my board and took off at about 1 mph. Yes, that’s right. I was barely moving. Then, all of a sudden, I face-planted into the sidewalk. Eight stitches later, I’m back on my feet! I’m always preaching to my boys about wearing their helmets — now they know why! Lesson learned for everyone involved! I’ll spare you the gory photo here, but if you’d like the full Frankenstein version, just respond to this email!
What I Am Seeing in the Market
Now on to more exciting stuff — the market. It’s still cooking! The oven is on high, not quite at broil temperatures, but definitely still at 450ºF. I know that many people are starting to think that inflation may be creeping in ... but if that happens, there will be even more people entering the real estate market as a way to hedge. So from a market standpoint, it’s clear — there is simply not enough supply of homes available.
Interest rates rose slightly in March and April to around 3.25% (those over 55 are laughing since historically, interest rates reached the teens). However, this past week, I had a client obtain a 2.85% rate. What will happen later this year? We do not know. But inventory is still critically low, and sellers are happy campers!
I still have a roughly equal amount of buyers and sellers, so I’ll provide more anecdotes from both sides of the action.
On the seller side: I had a condo in Kemp Mill listed for $159K go under contract over list price. I also have a 2 bedroom / 2 bathroom beautiful condo on the market and a super-duper single-family house in Columbia Heights, DC, ready to list next week. More details coming soon! On the buyer side: It is still tough! In the last 30 days, I have successfully helped two buyers. To win the house below, one of my buyers offered $50K over the list price, waived all contingencies, and closed in 14 days! The process wasn’t too painful, and the buyers are very excited! Congratulations J & J!
Increased Interest Rates on the Horizon?
Recently, Treasury Secretary Janet Yellen speculated that the Federal Reserve may have to raise interest rates to stifle inflation. While this was purely hypothetical on her part, what would increased Federal Reserve rates mean for prospective homebuyers?
While the Federal Reserve interest rate is not directly related to mortgage rates, it does have some influence. In a nutshell, what the Fed rate does is determine what banks pay when they borrow money in the short term from other banks. If a bank is suddenly paying higher interest rates on borrowed funds, they then try to find ways to make up for that loss. One approach is to pass those costs onto the customer in the form of higher mortgage interest rates.
This is an oversimplified explanation of a very complex system that even I don’t fully understand. Unfortunately, the ebb and flow of the economy is not nearly as predictable as we’d like it to be, so we’ll just have to wait and see how this all plays out!
Renovating Shepherd Park / Update on Hemlock
The house is progressing nicely! We have all of the framing done, and the rear doors and windows are in. The siding went up, and in the next couple of weeks, we will start installing the HVAC, plumbing, and electrical.
Can I Ask for a Favor?
95% of my clients come to me through referrals from all of you, and I can’t express how grateful I am for that! I’m never too busy to take a call, so please don’t hesitate to continue sending people my way!