Real estate broker Josh Flagg on Bravo’s “Million Dollar Listing Los Angeles” warns potential homebuyers to sign deals before interest rates get any higher.
Last week, the Federal Reserve raised the base interest rate It’s the third straight month of a 75 basis point decline as part of aggressive efforts to curb rampant inflation. The move pushed the federal funds rate, a key benchmark, from 3% to 3.25%, the highest since before the 2008 financial crisis.
New economic forecasts released by the central bank show that policymakers expect interest rates to reach 4.4% by the end of the year, suggesting a further three-quarters percentage point increase is under consideration. The CME’s FedWatch tool shows about a 60% chance of a 75 basis point upside at the Fed’s next meeting in November, and a 40% chance of a 50 basis point upside. One basis point is one hundredth of a percent.
The Federal Reserve’s move is gradual down to mortgage rates. Mortgage packager Freddie Mac said: 30 year fixed interest rate It averaged 6.7%, up from 6.29% a week ago.
“Rates are going to keep going up, so if people can still buy, I think it’s a good time,” Frag said in an interview with Fox Business.
Flagg, who is preparing to release a new book on October 4th, said: “The Deal: The Secret to Mastering the Art of Negotiation”has sold well over $2 billion in assets, ranking in the top five. Realtor in Los Angeles.
His clients include Maroon 5’s Adam Levine, “Grey’s Anatomy” producer Shonda Rhimes and DJ Steve Aoki. Flagg’s record sales performance included the sale of his Holmby Hills estate to his late fashion icon and socialite Besty Bloomingdale for nearly $40 million to his fashion designer, Tom Ford. It is included. He also sold his two highest priced lands on his 500 block in Beverly Hills.
Frag argues that the biggest mistake homebuyers make is getting too hung up on the price tag and going nickel and dimmed.
“If you do it every time, you’ll lose all your deals and you’ll never get the house you want. There’s no such thing as a perfect home unless you have an infinite budget and you can buy whatever you want. An infinite budget.” Even if there is, no home is perfect,” he explains. “Everybody has to make compromises and they have to recognize that. So you really have to look at what’s most important to you.”
Luxury home sales fell 28.1% year-on-year in the three months to August 31, 2022, the biggest drop since at least 2012, according to Redfin. lukewarm stock market and economic uncertainty.
“People looking for luxury homes are shocked to see the impact of rising mortgage rates on paper. The dollar could be stronger,” said Fairweather. statement. “Someone who was on the market for a $1.5 million home last year may now be capping his budget at $800,000, thanks to higher mortgage rates.”
The median sales price of luxury homes increased 10.5% year-over-year to $1.1 million in the three months ended August 31. It rose 20.3% in the same period last year, and recorded a record rise of 27.8% for the three months to 30 June. , 2021.
Luxury home prices are rising at a slower pace than non-luxury homes, rising 15.5% year-on-year to $335,000 in the three months to August 31, up from a record 17.2% year-on-year increase. from a significant increase to a slight decline. It increased by 19.7% in the three months ending March 31st.
High-end buyers are more likely to pay in cash, but Redfin points out that many still take out mortgages.
While Flagg acknowledged that house prices will eventually fall, he stressed that the property market is cyclical and another price increase is sure to follow.
“Even if the real estate deal gets a little better, why not make your monthly payments easier by fixing the interest rate for 30 years rather than waiting until the next year and making big monthly payments?” ‘ he asked.
He advises anyone interested in investing in real estate to invest quickly and hold onto that investment for as long as possible.
“No one has ever been poor by owning property. They hold property as long as possible and try to get as much as possible, because all things always go up over time,” Frag said. I’m here. “I can’t say the same for any other investment.”