December 13, 2005
Today for the 13th straight time, the Federal Reserve raised interest rates in an effort to combat inflation. With interest and mortgage rates rising and grumblings of a real estate market collapse, is it wise to get into the Charlottesville market?
As mortgage rates continue to rise, people often wonder if the real estate bubble will burst. Real Estate Agent Pat Sury with Montague Miller says that seems unlikely.
"The market has softened a little on the seller's market, not as strong of a seller's market, but really a very healthy market," she said.
Each market is different nationwide. The Northern Virginia/Washington, D.C. market is very dependent on a robust economy and low interest rates. The Charlottesville area has a much more stable market, based mostly on supply and demand.
"It would have to be a pretty substantial increase in interest rate I think to affect this market right now. There is still so much demand here," Sury said.
Much of the markets stability right now relates to the local economy. UVA and UVA Medical Center draw a large portion of the work force, but Charlottesville's scenery is starting to grow interest.
"Second home growth is a third of the sales right now that are happening in home sales relate to second home [buying] or investment homes," said Sury.
All-in-all, the housing market still looks strong.
"Prices will increase. I don't think as drastically as they have been increasing. Things will be slowing down some but continuing to be a healthy market," said Sury.
That yearly increase has averaged 12% and 16%. As home values continue to rise to a median price of $270,000, affordable housing becomes an issue.