Spring sales numbers were up in many categories across the DC metro area though the combination of 120 degree heat indices, and all that hot air steaming from the Capitol Dome has resulted in a summer slowdown which I believe will be reflected in the July and August numbers. Our market tends to slow down this time every year though this year might be different.
As I write this article the weekend before the August 2nd deadline there is still no agreement in Congress about the debt ceiling, and this week GDP numbers were revised downward for the 1st quarter 2011 and were miserably low in the 2nd quarter 2011. I believe this all spells some seriously good buy opportunities this fall! According to some analysts who run numbers on these things, a .5% interest rate hike in the next couple of weeks is likely as our credit rating takes a hit - which seems likely even if the debt ceiling is lifted. If we do indeed default, an interest rate hike of 1% or more is probable.
Luckily interest rates are already very low so going from 4.5% to 5.5% isn't likely to have a long-term negative effect on the market. 5.5% is still a fantastic rate though we have been lulled into a sense of normalcy with rates in the 4% range which will cause 5.5% to seem painfully high for a little while.
I predict this fall will be somewhat challenging in the real estate markets across the country as at a minimum our confidence in the trajectory our economy (and our country) has taken a hit.
We will continue to bounce back however as fundamentals that drive real estate markets such as supply and demand and affordability are well in alignment (and in some cases downright crazy good) with "normal" trend lines.
As a Realtor, you should hit lead generation in August harder than you have all year. August is the last month you have to set up the rest of your year and those that lead generate like mad in August will have a great 3rd and 4th quarters - those that don't - won't. The choice is yours.
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