PACIFICA (KRON) — With the Federal Reserve’s hike in interest rates earlier this week, the average person may not feel much of a difference in their pockets, but it may make a difference in what people decide to do with real estate.
“When a broker can send out a mailer to people in Pacifica showcasing some of the houses that sold over the asking price by 11 percent–13 percent–some of them–then you know it’s a seller’s market. But that may not be all it is,” real estate broker Lisa Eccleston said.
Eccleston remembers the days of 2005, when she could hold two open houses for a home on the market, and basically give the sellers a calendar of the next few weeks, predicting when they would close.
Now, 12 years and a recession later, homes on the Peninsula can get snatched up in less than two weeks.
“Pretty much, in this market, I would say in my case, I’m putting houses up on a Monday, doing a broker’s tour on a Tuesday, one open house, and taking offers the next week,” Eccleston said.
That’s why buyers are in bidding wars, a far cry from the days when Eccleston used to be in the business of helping buyers get their house for the lowest price.
“What I usually say to buyers in this market is we’re gonna help you–we’re gonna help you get the house,” Eccleston said.
This townhouse in Pacifica has had five offers just this week.
While it may seem like the recent .25 percent hike in interest rates by the Fed is only good for sellers, it’s also spurring a lot of buyers.
“Usually any small hike up in the interest will actually have the opposite effect of what most people think,” Eccleston said.
Because more interest rate increases are expected this year, a lot of buyers are willing to overlook high home prices and jump in before rates get any higher.
And here’s some OK news for renters.
Eccleston says rent rates, though still extremely high, are softer, meaning a landlord who wants to lease for $4,000 a month might not fill the unit for a few months, tempting them to drop the price by a couple hundred bucks.
“Rental rates are high, so what I’m seeing is people aren’t staying very long in a house if they’re paying basically a mortgage payment as rent,” Eccleston said.
It’s a lot of activity in a market that’s sure to continue changing throughout 2017.