Mortgage rates continue to be a drag on the housing market. In metro areas, there has been a large shift with new home sales now accounting for a much higher than normal share of the total sales. Why is this, given the excessive cost of new construction? What national homebuilders have that private sellers do not, is a captive mortgage company. Yes, in many cases this big, publicly trades homebuilding firms also own mortgage companies. So, in addition to being able to raise construction money cheaply by using shareholder funds, they can loan out money to move their new homes at below market rates, using funds provided by their own mortgage company.
We do not see this happening locally as we do not have any national homebuilders active in our region. But, if your Realtor is smart and creative, they can enhance your listing and attract more buyers by creating and offering special financing. With current rates of 7.75%-8.00%, wouldn’t a rate of 5%-6% look more attractive? By buying down the rate, you can offer a monthly payment that is much more attractive than the current market rates and expand the buyer pool. In this market, you need to be creative. If your Realtor has only worked in a strong Seller’s Market, it is unlikely they are creative. Get one that is!
Mike Heraty is License Partner and Managing Advisor for Engel & Volkers Pagosa Springs. His successful real estate practice has spanned over 30 years. Mike has closed over $250,000,000 in transactions in the local market. Reach him at 970 946-6030 or email: Mike@PagosaRealEstate.com. You can also explore more on our website http://PagosaRealEstate.com
