For the 3rd month in a row, all 4 of the key, objective real estate indicators are predicting higher prices for Fair Haven homes in the near future. The number of home sales is up, indicating higher demand; the number of listings is down, indicating less supply; the median selling price is up, saying you’ll have to pay more for a home than you would have a year ago; and the real estate absorption rate is shorter and within the range that indicates a “selller’s market”. Here are the actual numbers; any positive news for home buyers would have been highlighted in underlined italic font but as was the case last month, this month’s statistics don’t have any good news for buyers:
Fair Haven Single-Family Home Sales, January 1 – November 30
2014 2015 Comment
Sales 83 113 36% more homes were sold.
Listings/Month* 37 35 5% fewer homes on market.
Months Supply* 4.8 3.5 Stronger demand vs. supply.
Median Sale $692,000 $730,000 5% higher median sales price.
*based on the previous 12 months of listings
Most economists are predicting that the Federal Reserve will announce an increase in the federal funds rate at its meeting later today. If it happens it will be the first time the Fed has increased interest rates in nearly a decade, and will indicate the start of a process of “normalization” of interest rates, which have been held very low since the 2008 banking crisis. The Fed’s action will have a ripple effect through our economy, and home mortgage interest rates will rise as well. The only questions seem to be how much of an increase is coming this month, and how many other increases might be expected in 2016.
The consensus is that the Feds will act carefully and in very small steps, so changes in mortgage interest rates are expected to be small, at least for the short term. This will result in an initial spurt in home sales as consumers attempt to lock in low rates before too many other rate hikes occur. If you plan to buy a home in the next year, please read December 6th’s post, “Mortgage Advice from an Expert”, and consider the 7 recommendations presented in the article.
Start talking to one or more mortgage lenders, asking them what you need to give them in order to get a letter of mortgage pre-approval (NOT just a letter of mortgage “pre-qualification”). There should be no charge to get such a letter, and obtaining it doesn’t commit you to use that particular lender when the time comes for you to actually submit a mortgage request. Much of the information you submit for a letter of pre-approval will be used to process the mortgage request itself, so lenders who already have this information should be able to act more quickly that lenders who don’t have it in their files.
Talk to one or more local Realtors® and ask them to give you the names of several mortgage lenders with whom they’ve had recent positive experiences. Your choice of mortgage lender (and of an attorney) will be important later on when you’re trying to meet a specific target date for closing on a sale. There always are “last minute” items that turn up between the home inspection and the closing date, and you don’t want to be dealing with a mortgage lender who doesn’t have a good track record. In my experience, a local mortgage lender gives better service because both the Realtors and the attorneys have dealt with them in the past, and know who to call when problems arise. Mortgage lenders are very competitive with rates, and it’s unlikely that you’ll find a big difference between rates quoted by 3 different trusted lenders.
Yesterday’s advice and the advice above applies to everyone who intends to finance their home purchase with a mortgage, and not just to Fair Haven home buyers. The more you know about the home buying process, the better.
Leonard “Len” Dunikoski, GRI
Diane Turton Realtors – Rumson Office
8 West River Road
Rumson, NJ 07760
(732) 239-0739 (cell) (732) 530-6686 (office)