A few months ago, I watched a panel of economists and stock experts give their various opinions on what we might see the Federal Reserve do about interest rates considering our current inflation. One expert was adamant that the rates would remain low for one basic reason. Higher rates would also drive up what the U.S. government must pay to finance its deficit spending. I had heard this argument before, and it does have some validity . . . however, inflation now demands action from the Fed. How high will rates go? The word in the news is to expect at least two, possibly three more rate increases by the end of this year. Thirty-year mortgages were at 5.25% last time I checked.
REALTOR.com reports that in May the median listing home price for Austin / Round Rock was $627,000. That is up 25% from the previous May. The April median sales price was $550,000, but those were mostly listed in late February or March. With prices like these and climbing interest rates, first-time homebuyers barely have a chance. In fact, I feel certain that many of the homeowners in our area would be unable to afford their current home if they were to be in the market today. Great news for sellers, but a painful reality for buyers.
As expected, the property tax appraisals have been mailed out and the reaction has been intense – and interesting. More than in any time I can remember, people have been excited to see how their properties have appreciated and what they are now roughly worth. On the other hand, they are in total shock at the prospect of the amount of taxes they may be forced to pay. So far, most of the appraisals I have seen are arguably close to market value or below. The actual tax rates will be set in late September or early October and the tax statements will go out at that time. At that point, I predict a fair number of properties will hit the market due to the extra expense of the soaring taxes. I am working on two such listings right. It makes total sense for these sellers. Unused properties are currently bringing record prices . . . and record property taxes. It may be the perfect time to cash-out.
As always, I am available to help you with any real estate needs or questions you might have. I look forward to hearing from you.