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Welcome to Connie Mahan Real Estate Group


Welcome to Connie Mahan Real Estate Group - your source for Sumter County real estate. 

In addition to specializing in Sumter County, we also service Lake, Pasco, Hernando, Citrus, and Marion counties.

As a full service real estate brokerage firm we work side by side with sellers, buyers, investors, and builders in residential, commercial, vacant land, and property management.

If you own real estate that you're thinking of selling, we would be happy to provide you with a FREE Comparative Market Analysis.

In today's competitive real estate market, timing is everything. Many good properties are sold before they are ever advertised. Beat other buyers to the hottest new listings for sale in Sumter and the surrounding counties with our New Listings Notification

Please browse our website for listings, reports and important local real estate information.

 

Keeping you updated on the market!

For the week of 

December 8, 2014

Market Recap

Do Lower Oil Prices Lead to HIgher Housing Demands?

The question is intriguing, given the steep decline in oil and gasoline prices over the past couple months. After all, less money spent on gasoline, the more money that can be spent elsewhere. Housing is elsewhere.

 

CoreLogic recently tackled the oil/housing question in a blog post by one of its senior economist Molly Boesel. The quick answer is that it appears that lower oil prices can lead to higher housing demand. A few variables come into play, though: number of miles driven; the actual price of gasoline; and for certain homeowners, the price of oil for heating fuel.

 

Number of miles driven and gasoline prices are most interesting. Data show that the lower gasoline prices fall, the more buyers are willing to move from urban centers into higher-priced homes. The key is that consumers need to believe that lower gasoline prices are sustainable over the long haul. The longer gas prices fall, or hold lower levels, the more willing consumers are to buy a home, particularly a suburban home.  

 

Predicting oil prices, though, is as difficult as producing mortgage rates, maybe more so. Oil prices can hold low levels for an extended time, as in the 1990s. But oil prices are frequently spiky, and the spikes can be quite volatile. Oil priced at $65/barrel in one year can soon be $140/barrel the next.

 

In short, we are not banking on oil prices holding these low levels. But if they do, the good news is that housing is likely to be a beneficiary.

 

As for good news in the present, mortgage purchase applications continue to trend higher. The Mortgage Bankers Association's purchase index was up again last week, posting a 3% increase. Purchase activity has been gradually ratcheting higher over the past month. We are seeing more purchase activity despite a slight decrease in mortgage credit availability.  This suggests more buyers are entering the market, and they are getting credit.

Going forward, sustained lower oil prices would be nice, and so would a sustained rise in purchase application activity. The former gives consumers more money, the latter signifies the return to a more normalized lendingmarket.

 

Where Do We Go From Here?

We're near the time of the year when people begin to gaze into their crystal ball. What should we expect for 2015?

 

Bill McBride at CalculatedRiskBlog.com gathered estimates from a number of difference sources. So far, nothing is out of the ordinary. Most prognosticators see the recent past extending into the future. New home sales estimates range between 498,000 and 620,000 units on an annualized rate for 2015. (The NAR estimate is on the high end.) Total home starts range between 1.056 million and 1.3 million units on an annualized rate. (The NAR again offers the high-end estimate.)

 

On the price front, nearly everyone has throttled back price-appreciation expectations for next year. Estimates range between 2.4% and 5.2% annual price increases at the national level. (CoreLogic offers the high-end estimate.) This is no surprise. We've been saying since the beginning of 2014 that price appreciation will decelerate.  We expect it to continue to decelerate to within the range most analysts expect. This is, after all, a normalized range based on historical trends.

As for mortgage rates in 2015, CalculatedRiskBlog doesn't say.  But we see the rate on the 30-year fixed-rate loan hovering between 4.0% and 4.5% for the first quarter of 2015.  After that, it is hard to tell. Rates will depend on economic growth, job growth, wage rates, and inflation. If they are mostly up after the first three months, the Federal Reserve will start to talk up interest rates, which will lead to rates actually rising.

 

If you have any questions on the local market in your area or would like to discuss your next real estate step, don't hesitate to contact us.

We can schedule a "no strings attached" appointment to fully review your options in this market.  We have an action plan for you!


My team and I are diligent in our efforts and prove it with our results!

Don't wait, call or email today.
We look forward to hearing from you.
 

Sincerely,

 

Connie Mahan
Broker/Owner
Connie Mahan Real Estate Group Inc.
352-457-7553  Direct
352-569-0233   Office
866-819-0089  Toll-free fax


 

 Market Matters is brought to you by Josh Dougherty and FBC Home Loans

 

 


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