Finally the great election of 2016 is over. Still craziness in the streets which is unfortunate but we have a new President. Ot at least we will have in January. Lots of promises made and it will soon be seen how many are kept but no doubt Donald Trump is shaking up the markets. Including the real estate market.
It was important to get the election behind us and see how things shake out and already we are seeing some serious shaking. Somewhat interesting is how strong pending home sales in the Jupiter area have been since the election. While we have seen a 4% month over month reduction in Northern Palm Beaches pending home sales as of today we have seen them rise almost 10% over the past two weeks. A very bullish welcome by local homebuyers to our new president.
Inventory levels, as expected, climbed again for the 3rd straight month. Historical trends show we usually expect further inventory increases which should give buyers more options and help hold prices down.
Of more concern are interest rates which have moved considerably higher since the election. It was just 6 weeks ago rates on a 30 year confirming fixed mortgage hit an all time record low of 3.35%. As of this morning they sit at 3.88%, up over 40 basis points since the election. Nothing can take air out of a real estate balloon like rising interest rates so this is where we need to keep watching. Closely. Paradise Sharks still does not see how rates can move anywhere above 5% without causing some serious issues with home sales. It would also mean a huge bump in the interest due on our 20 trillion dollar debt whose reduction is one of President Trumps promises. It’s the one I would like most for him to make a reality. Time will tell.
It is still a week or so before we report the latest median condo prices in the Jupiter area but as of this morning they are down ever so slightly from where they were a month ago. Over the past couple weeks the median price of a single family are up ever so slightly and sit at new 10 year highs.
This years presidential election has shaken America and to me one of the biggest challenges of our next President will be trying to bring some unity back into this country. We all should be on the same team and no doubt some significant challenges facing us. So far the financial world seems to like what they see but it is still very early in this game.