While every market has it's own idiosyncrasies, I'm starting to wonder if my real estate market has spent some time over the past few years taking future business away from itself. We've all heard talk about how the available home inventory to purchase is low. The 10th grade economics reason for that is more homes were bought than came on the market for sale but there can be other underlying issues as well. Each of the last two Springs we've seen almost silly behavior by people trying to get homes bought with great home mortgage rates available and limited choices of what to buy. When that little run ends after 45-60 days the air has seemingly gone out of the balloon and certain price points go dark. In one instance last year March and April were crazy and when our traditional buying season hit in late May almost through Labor Day things were slow. Have the low mortgage rate and pent up demand times we're in caused potential future home buyers to lean into the market sooner than they may have? 2008-2011 was to a great degree a wasteland of real estate activity. As economic conditions improved and confidence returned there was a bit of irrationality to buyer's mind sets. They bought hard and fast in each of the last two Springs and then when true Summer (our true buying season) hit, things went somewhat soft. There's no doubt that artificially low home mortgage rates also contributed and that leads one to wonder about the future as rates rise.With, by some reports, over 70% of mortgage holders having rates below 4.5%, what happens when mortgage rates go to 7%? For every point mortgage rates rise you'll see fewer people inclined to move which in the end could be why we've seen buyers flushed into the current market at the expense of the future.
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