Today's hot news:   The Fed just gave the middle finger salute to home buyers!

Hi everybody, Joe Hillner with Your Home Sold Guaranteed Realty, where we guarantee your home will sell for 101% of asking price or we'll pay you the difference! 

Ok, so every week, I share market data to keep you informed with the local real estate market.  

Here is this week’s Boca Market Watch.

First, Single Family Homes:

89 new listings, very good, and ranging in price from $399K to $22M!  18 homes back on the market, while 84 homes listed took a price decrease, another huge jump, and 8 sellers raised their asking price.  And  a light week with 36 different properties under contract, and another 27 going pending.  23 homes were unsuccessful in selling and were taken off the market or the listing expired outright.  And a down week for sales with 58 homes sold, ranging from $315K to $16.5M!

Next up, Condos and Townhomes:

104 new listings, really good, but only if demand holds strong, and ranging from $104 Grand to $6.5 Million.  21 units came back on the market, 51 properties with a price decrease, that's a lot, and 4 sellers with an increase.  And a blah week with 47 different properties under contract, and 29 going pending,  And 24 condos or townhomes were unsuccessful in selling and were taken off the market or the listing expired. 66 closed sales this week, not great, and ranging in price from $89K to $1.5M.

Here's what's making news right now.

The Fed just dropped the hammer with a 75 basis point rate hike on Wednesday.  Although it was widely anticipated, the move was still a sobering action.  In fact, it was the largest interest rate increase in 35 years!

They're trying to tame the inflation monster that has run rampant since the beginning of the war in Ukraine.  Last month, instead of it going down a little as expected, the inflation rate actually increased to 8.6%.  That's the highest its been in 40 years.  

Most of you probably aren't old enough to remember the days of Stagflation back in the 80's.  That's when we had mortgage rates in the 17-18% range and a stagnant economy, and that persisted for years.

So what the Fed is trying to do is navigate what they call a soft landing for our economy.  Unfortunately, that's just a hypothetical and they really don't have that much influence.  Aside from this knee jerk monetary policy, and buying billions of dollars in bonds, there's not much that they can do.  

So even though the pundits are not predicting that we will drop into a recession this year, personally, I don't see how we can avoid it.  When they take their next rate hike this summer of another 3/4 of a point, or even a full point, that will effectively drive millions of buyers out of the real estate market.  Between the higher prices and interest rates in the 7-8% range, those buyers will no longer qualify to buy a home.  And we all know what a big factor real estate is to our economy.

To compound the matter, new construction housing starts dropped by over 14% last month, as construction costs spiked due to inflation.  So that will only put even more pressure on rental prices, even further squeezing frustrated buyers who were unable to purchase.

It looks like we're in for a bit of a roller coaster ride for the rest of the year.  Stay tuned...