Health & Fitness
St. Louis Real Estate Tip of the Week: Interest Rates Should Not Cause Buyers to Buy Homes
After months of steady lower interest rates, the interest rates started climbing this past June which caused a lower demand by buyers according to my colleagues working in the St. Louis County market.
Sellers decrease is increasing demand and home prices in St. Louis County Real Estate! The amount of new listings was stronger in June than it was in January this year. Sellers are listing, true, however the trend means less new listings this year than last year this time. The supply is relatively low compared to the buyers who want to buy. With buyers desiring to buy and less sellers wanting to sell, the demand has driven up the prices, which is very good news for sellers!
Tip of the Week: It’s important to watch the interest rates as they move up and down. The key to continued and increased sales is the cost of money. The interest rates and their fluctuation will affect buyers’ willingness to buy. After months of steady lower interest rates, the interest rates started climbing this past June which caused a lower demand by buyers according to my colleagues working in the St. Louis County market.
Mortgage rates have been kept artificially low for a long time, and we all knew they had to go up at some point – except now that day has come, and many consumers are realizing they weren't ready for it. If you're one of them, stop freaking out. The truth is, rising mortgage rates are not a big deal, and home financing is still incredibly affordable at today's rates. Historically speaking, interest rates are still extremely low. In 1980, mortgage interest rates averaged 12.71 percent and climbed all the way to 18.45 percent by September the next year. But people still bought homes, and believe it or not, home prices actually rose slightly during that period of time.
The difference between the monthly payment for a 3.5 percent interest rate and a 4.5 percent interest rate on a $208,000 loan is $119.90 per month. For the average home buyer, an increase in $119.90 is not going to make home buying totally unaffordable.
Today's home buyers are still poised to achieve the American Dream at a price we may never see again. As long as you're realistic about your ability to buy and what you can afford, rising rates should have little impact on your decision to go through with a purchase.
At this time, St. Louis County has a 4 month supply of inventory. According to the National Association of Realtors (NAR), four months’ supply creates a solid sellers’ market. This market is due to a lack of inventory and increased buyer activity.
St. Louis County posted an increase in number of homes sold. According to reports, 1,287 properties recently sold in June 2013 which is fairly consistent with the number of properties that sold in in June 2012.
With increased demand and lack of supply, St. Louis is seeing an increased average sales price. The average sales price year to date is $229,266. This is up from January 2013 when it was $150,340. Many remember back in 2007 when the average sales price in St. Louis County was $257,621.
Another positive sign is the average day on market in St. Louis. It now stands at 71 days. Last year the typical days on market were 102 days to market and sell a home. It’s more interesting to note that in January of this year, it was even reported that it took 102 days to sell a property. Thus, it’s good news for sellers that homes are selling more quickly.
If you want to get your home sold, it’s important to look for a Realtor 1.) who is realistic in the pricing, offering comparable sales to justify their recommended list price, 2.) who is able to offer suggestions for staging to increase the desirability of the home, 3.) who is business oriented in their approach to their own business and 4.) who has strong business partners who can assist in the various elements for a smooth transaction.
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Beverly Taki is a Missouri-licensed real estate broker who has successfully represented clients for 25 years. She is a broker salesperson at Keller Williams Realty St Louis. 10936 Manchester Road, St. Louis, MO 63122. Beverly has earned a certificate in dispute resolution from Pepperdine University, specializing in negotiation and mediation. Taki can be reached at beverlytaki@kw.com or 314.677.6366. Her website is beverlytakistlouis.com. Her blog is realestatestlou.com.