Not surprising, Cape Cod has been named one of the hottest luxury markets in the United States by a report released by Realtor. com. According to the report, Barnstable was number six for the most sought-after luxury homes in the country. The median list price for the top 1% in Barnstable was $15.9 million. Luxury real estate continues to be a hot commodity for today’s high-net-worth individuals. For the market to stabilize, we need a healthy supply of inventory and matching buyer demand. There are several moves that need to happen for this to be achieved. Since the start of the year the Federal Reserve has begun to tighten financial conditions to cool demand in the economy amid high inflation. It is anticipated that Fed policymakers will have a series of swift interest rate hikes throughout the year. The Fed completed the first raise to the benchmark rate last month for the first time in three years. Last week the average interest rate for a home loan rose to more than 5%, the highest level since November 2018. The rise in borrowing costs is the first move to help curtail buyer demand. Next, as demand decreases, supply will begin to organically increase. Then as we start to see supply increase, the median price will begin to soften. With the rate hikes on the horizon, it is highly recommended that sellers who have considered jumping into this market start to make serious considerations to capture the historically high prices this Spring. This is certainly one of the best seller markets we have ever seen, and it is expected to continue as we move into the second quarter of the year. With the bump in interest rates causing many buyers to lock in before the next increase, it is anticipated that sellers will still have multiple offers to choose from and buyers will still have fierce competition. Good to Know®
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