Posted on Saturday, April 04, 2015
(well priced newly constructed homes like this on-water Key West style home are drawing a lot of attention)
It is hard to believe rates are still at historic lows. As seasons start to draw to a close perhaps now is this time to grab that Naples Best Address and borrow at low rates.
Purchase volumes in Naples real estate accelerated last month (source: Matrix MLS) as buyers moved in to snap up Naples real estate. Many buyers are eyeing relatively low rates to help make this happen.
Please be advised we are Realtors not financial professionals and you should consult with a financial professional when looking to borrow or invest your money.
(condos under $300,000 with private beach shuttles are still available – this one is getting another buyer visit on Monday)
A quick look this morning at the ten-year treasury rate shows we are at 1.81% (source: CNN Money) – up from 1.78% last month. Buyers see cheap borrowing costs. Investors see cheap money to leverage investments. Savers see cash returning very little and look to other sources of income. All of this combines into the potential for increased real estate demand.
(maybe you “borrow for a view” like this Fiddler’s Creek single family home)
As a first time home buyer in 1981 I am still somewhat shocked by these historically rates. Rates were so high back then you just do not want to know about it.
What if rates rise? Say rates rise just 1% from these levels. An obvious mathematical computation would tell you if rates rise just 1% then for every $100,000 borrowed you are going to pay back $1,000+ MORE per year to settle the interest and start paying back principal.
Even country clubs, private schools and non-profits in Naples are taking advantage of these low rates. Well why not? Isn’t this the idea of government supported low rates? Encourage folks to borrow and spend and boost the economy? You betcha – get the economy going again by providing “cheap” money so folks can buy new things.
(maybe you borrow for this pre-construction British West Indies Home – on the water on Naples Bay)
Should you be thinking about buying real estate at these low rates? When we look back on our real estate forecasts over the last couple of years we did pretty well – lower inventories, steady purchase volume and significant price increases as the Naples real estate upward cycle continued. However interest rates stayed low, very low in fact. As we said in the 2014 forecast we are Realtors not financial professionals and you should consult with a financial professional when looking at financial markets – but boy oh boy we thought rates would rise.
Now it looks like we are going to see rates stay low for a while longer. Sure the Fed could pull its support and maybe rates would rise to increase demand for bonds but who knows the timing of that one?
Reuters reported we will probably see low rates for a while in their article at U.S. consumer prices rise on shelter costs, but inflation muted. So where does that leave us in Naples real estate? Low mortgage rates is where it leaves us. Not quite the “cheap money” days of yesterday but many buyers are seeing these low mortgage rates and rising real estate prices, doing a little math and realizing real estate financial returns over these last few months have been pretty darn good. Plus you will own a place in the paradise of Naples, Florida if you write that contract.
(maybe you buy one and knock it down to capture a beautiful south facing view like we did)
Should you be buying here? Only if you find that perfect place for yourself, the one with the “wow” factor, the one you will love through the crazy ups and downs of this real estate market.
I am thinking about the offers we wrote just this past month – folks on the fence for a while and now buying, a long time resident changing up his residence, all buyers who are taking advantage of these rates.
And these are just the conventional home owners. What about the investors? Many of the “flippers” and spec home builders are very pleased with the cheap rates and the related jump in Naples real estate prices. However we may be victims of our own success as the price increases limit opportunities to make it work again. We all have a “go/no go” spreadsheet to help us sort an investment property decisions and more and more the numbers say “no” as prices rise.
(individual investors are getting their hands dirty and building up new offerings)
Now that season is drawing to close and visiting buyers are running out of time to buy – these low rates may help fight the higher prices. Folks are buying big time even with the most recent price run up . Judging by the numbers of people, great cars, evening social events, and “save the date” emails Naples is really rolling.
Why not pick up the phone and catch up with us and let us know how you are doing? Just give us a call at 239.595.3920 (Nan) or 239.595.3921 (Mark) or 239.285.2038 (David).
Please also consider reading our book “Understanding Naples Real Estate” to get you started on a real estate search https://www.naplesbestaddresses.com/offer/ or just give us a call about things to do here.
All the best,
Nan, Mark and David Goebel, PA’s
Co-Founders Naples Best Addresses
Coldwell Banker
Mark Goebel, PA and Nan Goebel, PA
REALTOR Coldwell Banker 5th Avenue South
Mobile: 239.595.3921 239.595.3920
NaplesBestAddresses.com
Facebook: NaplesBestAddresses
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No legal, investment, or tax advice is being given in this Blog. Consult with legal, financial and tax professionals before acting on any real estate transaction. Actual real estate price and sales results are subject to market forces and are not completely predictable. The writings of this Blog are intended for the sole use of our clients.
We are pleased to announce a portion of our real estate earnings go to support the The Naples Botanical Garden, Habitat for Humanity Collier Count and The Naples Winter Wine Festival.
Some of the data related to Naples homes for sale and Naples real estate for sale on the NaplesBestAddresses.com website comes in part from the Broker reciprocity program of M.L.S. of Naples, Inc. The properties displayed here may not be all the properties available through the MLS reciprocity Program. This information is deemed reliable but is not guaranteed. Buyers and sellers are responsible for verifying all information about their purchase prior to closing.
Mark Goebel, PA is a REALTOR with Coldwell Banker on 5th avenue in Naples, Florida with 35+ years of visiting and living in Naples. After 25 years at Accenture, Mark retired as a managing director and spends his time helping non profits and building a Naples real estate team with his wife Nan and son David. Talk to Mark, Nan and Dave about life in Naples and why they chose this place to live full-time over all others and enjoy Naples real estate.
Contact us to learn more about Naples real estate trends, the florida rental market, Naples design ideas like coastal contemporary and transitional designs or just get a feel for the place like Naples Florida population trends.
