Hello All! Thanks for checking in regarding the state of affairs in the Big Bear real estate market. In my last blog I mentioned how unexpectedly slow the summer selling season had been through July. Well, it seems that the lure of rock bottom interest rates is finally kicking in as demand is on the rise so far in August.
I had two clients finance a second home purchase, fixed for thirty years, at 4.375% last week, and that is truly astounding. In fact, a client of mine I was with over the weekend was actually disappointed, as they were looking for a bigger tax write-off than the current rates provided. They ended up looking at bigger houses. It is amazing what such a steep drop in interest rates does to a buyer’s purchasing power.
That said, as we are now looking at rates that haven’t existed since the 1950’s, how much lower can they be expected to go? And for how long might they remain at these historic levels? I would say, not much and not too long, respectively. In fact many experts are surprised they haven’t already started to correct upwards. But our government is once again engaged in an effort to keep long term bond yields low by actively buying up our own debt. Interesting policy choice, as they have seemingly run out of bullets with short term rates. By becoming big buyers in the open market of the bonds they issue, they are keeping the long term rates artificially low in order to allow for more time for housing and the economy as a whole, to recover. So, not if, but when they stop actively buying their own debt, rates will need to re-adjust to a normal supply and demand cycle, meaning they will most likely be heading back up at some point.
In the meantime, it is a great time to lock a rate! Especially considering the fantastic selection and deeply discounted prices here in the Big Bear real estate market.
Speaking of selection, the supply in Big Bear is also on the rise as there are now 872 residential listings to choose from and we currently have 220 homes sold and/or under contract since the beginning of August, which is back on pace, and even a bit ahead, of what we saw over the same time period in 2009. So it is time to take advantage, yes? If you would like more information on any you see for sale or lender owned properties soon to be on the market, do let me know. I always look forward to hearing from you. Until next time - Happy Hunting.