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Mortgage Rates' Outsized Impact on Coop Sales

    Home Newsletter Mortgage Rates' Outsized Impact on Coop Sales
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    Mortgage Rates' Outsized Impact on Coop Sales

    By admin | Newsletter | Comments are Closed | June 23, 2015 | 0

    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.

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