The amazingly low interest rates hovering just above 4% were with us long enough that we began to believe they were here to stay. But in November rates began trending upward to 4.5% and in December, 4.75% and now one is lucky to lock in at 5% for a 30-year fixed. There is no reason to believe that rates won’t continue to be on the rise as we head into the spring home-selling season. This is the time to buy. For sellers, it is a great time to move up, and if you are moving down, it would be best if we were to study your immediate market to determine if the timing is good. Either way, there is good buyer energy out there, as many folks are already aware that rates are trending upwards and they would like to take advantage of low interest rates today.
Meanwhile, average Portland home prices are down 24.9 percent since their July 2007 high, according to the Standard & Poor’s Case-Shiller index. The state ranked No. 12 nationally in foreclosure activity last year. Portland, Seattle and six other cities hit new market lows in November, according to the monthly S&P/Case-Shiller Home Price Indices released on 1/25/11. Portland prices have retreated to March 2005 levels. Portland and Seattle are just now hitting bottom-of-market prices, even though the rest of the country bottomed out in early 2009 after peaking in 2006 and 2007. While this may seem like doom and gloom, the fact is that the timing is ideal to have a large inventory of homes to choose from, purchase, and then lock into what is still a historically low interest rate.
