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Interest Rates Affect Home Sales - But Not All

Posted by on in Flagler County Real Estate
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As interest rates slowly rise, builders and developers are reporting that new home sales fell by more than expected in the 2nd quarter of 2013. Mortgage lenders have been writing loans, buyers have been shopping, but the slight rise in interest rates has been enough to keep people out of the new home market. That's one side of the story,

The other side is existing home sales. Existing homes are still selling and inventory is still very low. Some of those sales can be accounted for by investors who continue to purchase either for income property or with a plan to flip as the market prices go up. Some sales are accounted for by the in-migration of people from northern states and Canada to Florida's sunny shores. Buyers from other areas often prefer established neighborhoods with mature landscaping and a proven economic trend over a development that is not built out yet.  Established schools and other support services can make a difference to a family moving in to the area with school-aged children.

I have also spoken to real estate appraisers who say that no matter what the appeal of a home where you pick the colors, the finishes, the landscaping, a model home does not have the appeal of a well-maintained home that is being lived in.  That existing house has a homey-feel to it and many sellers are adept at staging and showing their homes off to potential buyers.

There are plenty of diverse reasons but however you look at it, existing home sales are strong and show no sign of slumping; new home sales are struggling. We cannot be sure that interest rates that continue to rise would not have an affect on existing inventory but for now we are cautiously optimistic.  We see strong sales trends here in Flagler County home sales and we are delighted to be a part of this trend. If you have thought of listing your home, contact us! We're ready to sell it!

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