07/09/2021 - I received a text message from a client concerned about the economy and how it could effect the sale of their home that we are putting on the market next week. Specifically, they are concerned about interest rates dropping, the market will shift in a decline and could crash or cause an extreme correction.
This concern is something I addressed in a recent post that you can read here: Is This a Bubble? but I thought it was worth exploring again.
I shared my clients concern with David Tandy, President of Texas National Title. He was on vacation, but I love that he took the time to respond so I could help my clients feel comfortable and confident in their decision to sell their home.
Here is what David had to say:
I’m on vacation so I can’t write much. Here are important points to highlight.
1) Low interest rates help offset the increase in home prices. Ultimately the Fed wants to keep rates low for many reasons which helps home buyers.
2) The economy is driven by having a healthy job market. And there has never been a hotter job market. Google “Austin chamber of commerce job report” and look at the most recent report. It shows there are almost 90,000 job postings per month. Far and away the highest it’s ever been. The economy is very hot and there are not enough employees with the needed skills.
3) There is no danger of a bubble bursting. Mortgages have high underwriting standards. Loans have not been made to people who cannot afford them. Many sales have been for cash and many people have had to put down large down payments. People do not walk away from mortgages when they have large amounts of equity.
4) Forbearance is not an issue. There are only about 2 million loans still in forbearance. And all of those have equity.
5) Inventory will remain an issue for the next 6 years at least. It will take at least that long for builders to catch up to our population growth.
6) Austin is in really good shape for jobs. Google, Apple, Tesla have yet to really start the hiring.
I’ll send more when I get back on the 14th
In addition to David's comments, Austin is currently ranked as the #3 Best City to Live in the US in 2020 and 2021 AND Austin has been named THE #1 CITY to Start a Business in 2020 for the third consecutive year! There is not a better place to be than Austin Texas!
If you or someone you know is in that market to buy or sell in the Austin area, I would love the opportunity to help!