GULF COAST, MS (WLOX) - If you’re thinking of buying or selling a home, the quicker you do so could be to your benefit. The Federal Reserve Board controls the cost of borrowing money, and that cost has been going up. What will be the impact on the Gulf Coast real estate market? Experts weighed in with their thoughts.
2018 was a good year for real estate on the Gulf Coast, with sales up 10 percent from the previous year. With four rate hikes totaling 1 percent last year, that could change, according to realtor Bryan David.
“We hear a lot of talk about prices starting to reduce and slowing, but here on the coast, we kind of lag behind the market, so we’re showing signs that it’s going to keep on going. Five is going to be the new norm as far as interest rates go," David said.
He added that rate hikes by the Fed add thousands to the cost of a home.
“Affordability is definitely going to decrease for sure for those buyers, and those inventories in those price bands are definitely much lower,” David said.
Speaking of inventory, change is on the way in that regard as well.
“We are expecting rates being increased in 2019," said realtor Anna Kral. "We have low inventory at this moment, but are expecting an inventory increase in springtime or the beginning of summer.”
No doubt, all eyes are on the action of the Fed, from stockbrokers, to real estate brokers, to commercial lenders. One person familiar with the actions of the Fed is a Pass Christian man who actually served on the Fed for more than six years and is concerned with the upward movement of interest rates.
“Candidly, I think they have probably overshot their mark this time," said Dave Dennis. “When you overcompensate, which is probably what they’re trying to do, you take some first time home builders and buyers out of the market.”
He also had another problem with recent Fed action.
“What I’m concerned about is if rates are too high, the home market suddenly becomes a renter’s market," Dennis said.
The coast has one thing going for it: warm weather during the winter months, according to Kral.
“I have personally a list of buyers from different states, especially north. Missouri, Minnesota, Illinois, California and they are snowbirds," she said.
Snowbirds looking to move here, no matter what the cost.
The chairman of the Fed has indicated there will be two more rate hike approvals in 2019, totaling one half percent.