The Impact of Rising Rates on Our Recovering Market

Recently rates have started to creep up again and the Strib interviewed Edina Realty Head Honcho Ron Peltier about the recovering local real estate market:

Edina Realty President Bob Peltier said that although the spring market was something of a disappointment, he's optimistic that the market is on the rebound.

"I was hoping it would have been better, but it was definitely a bump in the road," he said. "You could see it and you could feel it."

Open house traffic is up, buyers are making offers on houses that are priced right and there have even been reports of multiple offers on houses that "exude pride of ownership," he said.

He cited several recent examples of sellers who sold quickly or received multiple offers on their houses, including a $599,000 house in Eagan that got six offers within three days of being listed and a $1.1 million house in St. Paul that sold, within six days of being listed, for full price.

"Good homes, fairly priced and well taken care of, are selling," Peltier said. "But we have a lot of stale inventory that's had no price reductions."

Mr. Peltier was also asked his take on the impact the recent uptick in mortgage rates might have on the market:

Peltier said that rising rates could actually be a nudge for prospective buyers to act soon, particularly if the bond market continues to put upward pressure on mortgage rates, which haven't crossed the 7 percent threshold in several years. If that happens, though, the market will notice.

"A 7 [percent rate] will be a little scarier," he said, "But as long as there's a 6 in front of [the fraction] it's going to be okay."

I know one thing, Ron Peltier is one of the most respected minds in the Real Estate Biz and I certainly would not bet against anything he has to say. His vision and willingness to change with the times are one reason Edina Realty continues to lead the marketplace despite intense competition from other major brokerages, discount brokers, the Internet and a challenging market.

I rarely ever sing the praises of Edina Realty on this site but make no mistake, they are the best in the business and I am happy and privileged to plant my flag with them!