How Will the Fed's Recent Decision Influence the Market?

The Fed’s recent decision is going to have a big impact on our economy and real estate market. Here is everything you need to know.

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The Fed just announced a move that will have a big impact on sellers and buyers.

At the recent meeting on September 20th, the Fed decided to cut back their balance sheet. While this might sound boring compared to the usual news of Fed rate hikes, it’s actually a big deal.

The financial crisis we saw a decade ago caused the Fed to take emergency measures. So, they injected a huge amount of money into the economy by buying up various financial assets in an enormous sum.

These financial assets amounted to a sum of about 25% of the United States economy at that time. But now, the economy has recovered to the point where the Fed feels comfortable taking some of this money back.

As you can imagine, this is going to have a huge impact on our economy and real estate market. This change is going to put upward pressure on consumer borrowing costs such as mortgage rates.

This change is going to put upward pressure on consumer borrowing costs such as mortgage rates.

In other words, if you are thinking of buying a home you should know that the Fed’s most recent move will eventually make it more expensive to do so.

Also, sellers must be aware that this change could result in fewer interested buyers. This might lead to a decrease in prices, making it harder to sell.

However, this is not an immediate change. The rollback will be gradual, with the Fed taking back just $10 billion per month. Compared to the $4.5 trillion total that was borrowed originally, this is not a significant amount.

While the Fed’s move will not take effect immediately, you should act quickly if you have been thinking of buying or selling. Now is the time to make your move before the process of this change starts to escalate.

If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.

How Is Southern Maine Real Estate Performing?

Buying a home? Click here to perform a full home search

Selling a home? Click here for a FREE Home Price Evaluation

Today we are going to talk about what’s been happening in the Southern Maine real estate market lately and what it means for you as a buyer and/or seller.

In many areas around Southern Maine, we have very low inventory. This is a great thing for sellers, because there are still plenty of buyers out there. Homes that haven’t been selling are selling now and some homes are going on the market and going under contract within a week!

Right now, we’ve got 54 days left until spring. If you’ve been thinking about selling at all, it may be a good idea for you to get your home on the market now before the competition has a chance to. Inventory will significantly increase in spring. By listing now, you will likely net more money than you would if you came on the market in the spring.

On the buyer side, rates did go up a bit in December. However, they are still incredibly low and some of the best we’ve seen in years. The only thing that isn’t so ideal for buyers has been the low inventory. A lot of buyers are having to wait for homes, and aren’t able to negotiate as much with the sellers because they are in control. We don’t know when interest rates will go up, but we do know they are extremely low right now and when they do go up, you will lose a lot of purchasing power.

If you’re thinking of buying, selling, or investing in Southern Maine real estate, give us a call or send us an email. We look forward to speaking with you!