SW Florida August home prices stabilize ending a three month decline in average home prices. Median home prices peaked in May and only slightly declined in July. Median home prices held steady for August.
We are watching daily inventory counts to see if there is any movement. If anything, inventory has declined since August numbers. We do not see building inventory and many properties are still receiving multiple offers.
Today as I write this article the 10-year note stands at 1.529% That number will fluctuate throughout the day. It has trended up the past month. For instance, it was about 1.289% a little over a month ago. The reason we track this financial instrument is because 30-year mortgages are pegged to the 10-year note. My unofficial formula is adding about 1.6% to whatever the 10-year note is, and it will get you close to current mortgage rates.
That would put us close to 3.125% to 3.25% interest rate, which is about where rates are at with no points. Rising rates can motivate buyers to buy now, but it also cuts into purchasing power. Rising rates may not make a difference now as we have more buyers than sellers, but someday it could if the market slows down.
We are also watching the price of oil. Rising oil is a clue to rising inflation and a barometer of pressures on bond yields which influence interest rates. As of today, West Texas intermediate crude oil is at $79. This is up significantly and could lead to more inflation.
If congress passes more unfunded spending in the wake of rising inflation, it could spark interest rates rising faster. If that happens, all eyes will be on stock markets and real estate markets. The United States is at a precarious time with our debt to GDP ratio, and any moves could trigger interest rate swings.
If financial markets do swing, the next question is what effect will that have on consumer behavior? Where will people want to live if they leave their job? We are also at a critical time with jobs and vaccinations. The federal government is mandating all health care employees be vaccinated or health care providers will lose their Medicare funding. No hospital or large provider can afford to do that. The question is. How many people will quit or be let go from their jobs in health care?
It is not just healthcare either. Many teachers are facing the same dilemma. In New York alone, we have heard reports of 150,000 teachers at risk of losing their job.
Vaccine Mandates Effect on Real Estate
If the mandates stick, will these people stay where they are or make a move? Florida has been a popular destination. With so much uncertainty, it will be fascinating to watch how these factors play out. In any such transitions, there are always winners and losers. What effect this will have on Florida and our real estate market remains to be seen.
Rising rates tend to temper the market. Changing demographics can further exacerbate a declining situation or moderate losses, depending on where you live.
For anyone to tell you they can predict the future right now would be absurd. All we can do is open a window into our thinking and show you some of the factors we are looking at. We have a list of 7 key indicators we will be tracking.
One thing is for sure. Ellis Team clients will always have the latest information on what we are seeing. We feel it is our duty to buyers and sellers to have our latest research. It is part of why people hire us. We do not mind sharing some of this research with News Press readers as we feel the public should be informed.
If you are interested in selling, always call Brett or Sande Ellis 239-310-6500. We can discuss what we are seeing and how this will affect your property value. For a free online instant property valuation, visit www.SWFLHomevalues.com Our system will update you every month the value of your home.
The Ellis Team looks forward to speaking with You!
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