Notes on the Year-end


2015 wrapped up with a flurry of activity for my buyers, in part due to friendlier pricing and a motivation to secure financing before the Fed raised rates. Properties that were priced correctly sold briskly, and over-priced properties saw swifter price adjustments and drew negotiations. For buyers, this meant a more rational marketplace, and for sellers, it meant adjusting to a more rational marketplace. As for interest rates, last week the Fed finally announced that it was raising interest rates by 0.25 to 0.50 percent. In response, mortgage rates creeped up a few hundredths of a point. While rates are expected to continue their climb, it will most likely be a steady uptick and not significantly impact the housing market in NYC in the next 12-18 months. In the last few months, many buyers have expressed concern to me about rising rates and their potential impact. My advice has been to examine the actual effects of a few hundredths or tenths of a percentage point on their monthly payments and remind them that in 2013, 4.25% on a 30-year fixed mortgage was considered a great bargain. Moreover, for many buyers, rising interest rates may be the harbinger of better returns on the rest of their investment.

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