Two of the most important and closely watched sectors of our economy when looking ahead in the 30A real estate market are recent home prices/housing starts and the mortgage interest rates.
In recent weeks we have seen a sell-off in the stock market which has pushed Mortgage Bond prices considerably higher. Concerns about slowing global economic growth and the stock market reaching an all time high of 17,350 several weeks ago, triggered a substantial sell off as investors took profits and also moved money into the bond markets. This is good news for mortgage interest rates as they have fallen over the past several months after predictions of increases through the year.
In housing news, research firm Core Logic reports home prices rose by 6.45% from August, 2013 through August, 2014. This news reflects a moderation in price increases which were substantial in 2012 and 2013 and have caused “sticker shock” here along the beaches of 30A. We need healthy but sustainable increases and not the 20% jumps we have seen in 2012 and 2013. What we can take away from the 6.45% growth rate is that price gains have, in fact, slowed to more normal and sustainable levels after large jumps in appreciation.
Bottom line here is good news. Prices are moderating to sustainable levels and interest rates are still a great bargain. Everything points to appreciation rates of around 5 to 6% a year so now is a great time to buy and even borrow money to do so.