Hat tip to daytrip for sending in this article from money.cnn.com.
An excerpt:
San Diego real estate agent Jesse Zagorsky said one of his clients put in an offer on a home last Friday for $650,000, nearly $35,000 more than the home’s listing price.
Over the weekend, the buyer received a new rate that was more than a half a percentage point higher. They came back on Monday and reduced their offer by $15,000.
“The sellers said, ‘We’re very disappointed — but we’ll take it,'” said Zagorsky.
Soooo surprised…. NOT.
http://globaleconomicanalysis.blogspot.com/2013/06/10-year-treasury-yield-up-100-basis.html
The UT experts are unanimous No to the question:
http://www.utsandiego.com/news/2013/Jun/28/mortgage-rates-rising-increase-stall-housing/?#article-copy
Bill thinks price increases will slow, but not decline. (most sellers will give up than take less):
http://www.calculatedriskblog.com/2013/06/goldman-on-impact-on-gdp-of-higher.html
Show me what those experts were saying in 2007; otherwise, they’re just talking their book.
I don’t give credence to anyone that didn’t publicly see the obvious back then. Beyond you & Toscano that doesn’t leave much in the SD area.
We dont need any experts for the basics.
How many sellers in the coastal market really have a NEED to sell, especially if they refinanced with low interest rates in the recent past?
In the coastal area, sellers will simply leave the market and market will stagnate. Thats how it has been historically.
Case in point … 983 Turnstone in Aviara.
http://www.redfin.com/CA/Carlsbad/983-Turnstone-Rd-92011/home/3709341
Tried to sell for 900K+, more than once during downturn, but left the market when nobody buzzed. Now going strong at the same price. Just an example.
Sellers are heading for bubble-era peak prices and quite likely they will get there sooner than later. If buyers decide to rent (instead of buying), then sellers will also rent (instead of selling).
Only way to reverse the trend (in coastal market), would be a crash in the rental prices. Are we expecting the rents to decrease because interest rates are increasing?