Big double-whammy looming for potential homesellers [View All]

[Jamison]

Working in the real estate industry I have noticed a few things recently in my region.

Here in St. Louis we have a minor bubble market, and there are signs that it's beginning to burst. I can remember when I first got into the business that it was almost never necessary to lower the initial listing price on a house in order for it to sell in a timely manner. Recently however I'd say that the agents in my office have had to drop prices on about 60% of their listed homes in order to get offers. I wonder if the same thing is happening nationally too?

Secondly, there is widespread panic in the industry going on about fears of the Fed jacking up interest rates to high levels. Rates are still relatively low, but there is fear that the 18-19% interest rates we had in the early 1980's could return in a few years if the Fed continues steady rate hikes.

The combination of these is very bad for sellers, with the last one being the worst by far. Who in their right mind would purchase a home at 18-19%?

Just wondering if you all are seeing the same things and have the same fears.