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rate-history

Are rising rates that big of a deal?

Maybe – and only if they mess with the buyers’ psychology.

We have been spoiled with rates in the mid-3s for the last six months – including jumbos – and our local market has been cooking. Buyers have been hoping for any break, but if they find the right house at a decent price, will an extra 1/2% on rate stop them?

Probably not – we are lucky to live in a very affluent area, where the majority of houses sell for more than $1,000,000:

NSDCC Detached-Home Sales, Jan-Oct

Year
Total # of Sales
Median SP
Sales Over $1M
% of Total
2012
2,619
$825,000
907
35%
2013
2,820
$946,944
1,272
45%
2014
2,427
$1,022,000
1,243
51%
2015
2,578
$1,089,450
1,430
55%
2016
2,536
$1,160,000
1,548
61%

Some buyers will dig in just on principle – if they have to pay a higher rate, logically the seller should be more flexible on price. But if the right house is found, and wifey kicks you in the shins and says ‘buy the house’, the extra half-point isn’t going to matter.

Especially in these areas:

Percentage of Detached-Home Sales Over $1M, Jan-Oct, 2016:

La Jolla, 92037 = 97%

Del Mar, 92014 = 97%

RSF, 92067 = 100%

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