If I dared to look back on my prior posts, I’m sure that I would see an expectation of rising mortgage rates by the end of 2014.
Now, we aren’t expected to see them until September of 2015.
And, given the caution of the Fed in the last 6-7 years, who would be surprised if this rise ends up being minimal for another year?
The summertime generally indicates a slowing both of
property coming to market and of sales volume.
Our latest Absorption Report,
showing the rates of sales volume, is quite interesting.
We have seen an
overall inventory increase (though inventory is actually DOWN from May 2015), while inventory remains even lower with cooperative apartments.
A
growing inventory difference between condo and coop
This separation between coops and condos indicates some condo overpricing and the subsequent compression of rates of return.
This is quite different
from the market for buyers who are financing
(primary home buyers) where the mortgage rate environment has accelerated buyer action, especially for cooperatives.
It is then harder to find “deals” on the condo side.
Absent a massive
growth of inventory, which could happen if coop sellers overprice too badly, inventory levels should grow more slowly for cooperatives at very different rates
from what
we’re seeing with condominium.
There are some different explanations for what we’re seeing in the condo market in general, which I’ll tackle in another little post.
As you might guess, it’s probably a little bit of everything.