Are interest rates going to burst the housing bubble?
Interest rates hit 5% for the first time since 2011, the RBC Heritage comes to a conclusion, and we open the mailbag to talk about the Metaverse. Thanks to our special guest, Dick Datz for coming on to give his perspective on the Hilton Head Market!
Mortgage rates hit 5% highest, they've been in 11 years in Jordan space. When's the heritage, this and more coming up on this week's market Mondays. So this week I am thrilled to have the infamous diktats with me. How's it going? Dick's doing great, Dan. Thanks for having me. So I wanted you to come on and tell everybody what the hell is going on. Real estate on Hilton head island. Right now. It's like, you can't find a house, but things seem to be changing. I think so we're seeing more, more properties come on the market then not still an abundance, but there are more properties coming on, giving an example. Uh, Palmetto dunes bill is seem to be, um, there's a lot more inventory up there than I've seen in a while. It'll get absorbed. You know, a few weeks ago, there were just, just one Hampton place. Now there's three things like that. So, um, if you're considering selling, uh, you might have a one, one of a kind property. So, uh, that's what we're kind of trying to tell people as we speak to them in our day-to-day business. Okay. Is this a sign of the bubble that everybody's talking about coming? Is that why all of a sudden now there's three Hampton places. I don't think so because there's. Uh, scarcity of villas and ha and homes for sale here on the market. So I, I don't, I don't see that kind of bubble coming, but there's just, you know, there might be more than there was last week. So that type of thing. We're telling you every week, there is no bubble coming. Don't believe it. Interest rates, interest rates have ticked up. Now they're over 5%. Is that going to have an impact? I don't think so. Because majority of the people that we're selling properties to are paying cash at least are submitting cash offers. Some may be getting mortgages, but, um, we don't see that in our marketplace here. Yeah. So, I mean, it's going to have a huge impact on refi business, right? Like was like, if you were going to refinance your house and you haven't done it by. Like you've missed the boat. You're not gonna do it. Right. You're not gonna do it. So it's a huge effect on that. So there's going to be a lot less loans written, but the majority of those are going to be refiled loans. One thing that you do have to be careful of is if you have any kind of an extended closing, right? Like I've heard of situations where people buy a house from a contractor and the contractor is building their. And the house gets all done and they go to get alone and the interest rate has gone up enough that they're having trouble affording the new payment, you know, with the additional interest added in. And, uh, it's something that you really need to think about and have a plan for a peer in that boat because you know, that's a perfect storm. New construction's a perfect storm, right? Like it takes long, right. Things are back-ordered prices are through the roof. So you're getting nailed on the additional cost of construction and buildings. And then, oh, on top of it, you're going to pay more in interest to the bank on your loan. That's causing a problem with, and one way of counteracting that too. I haven't checked in a while, uh, because a lot of what we do on the island is not new construction, but, uh, there are programs out there where you can get, um, a construction term where you can lock in a rate, uh, after your condition, your construction is done. So that's another, it's another avenue that somebody might consider it. But it's not going to be rising. Interest rates is not going to be the death now of our real estate market. Uh, historically, uh, I remember being in this business where we had 18% interest rates and, you know, if you got a 13% rate, people thought they were doing great. So you just have to look at the overall picture. Yeah. Yeah. Jordan Speith wins the tournament. What do you think? Nice, great champion. Uh, it's great for help head, um, you know, uh, Hilton head. Uh, a long history of great champions, uh, Norman, uh, go right down the list. Arnold Palmer. Uh, yeah, he's a great champion. That's it's great for him. Okay. He's a great guy. I don't know if you saw that video, but after he finished, you know, he was the first one to put up 1300 and, uh, he was going back to the. I signed his card and there was a group of kids there waiting to get autographs. And he went and stretchy gentlemen explained to all of them that he might be in a playoff and he was going to need to stay warm and keep practicing. But that he promised them that once he knew he was done, he would come back and sign. And I understand that after he won, he held true on that promise and went and stayed until he signed to everybody's off. That's why golf is such a great game there. Just, uh, um, all the players are great. Great champions. And they're great, gentlemen. Yeah, he's a, he's a good guy. He's won the us open. He's won the mastery if won the British open. Just have one more to go for the career plan championship. Congratulations, Jordan. And congratulations on Hilton head island, the weather, while the weather worked out at great tournaments. Yeah, dig before you go. You get to help me with this week. Mailbag question. Okay. I'll read it for everybody. This one comes from John. What do you think of real estate and the metaverse? Is it something I should invest in? You're asking me, Dan, I don't have an answer. That one, I don't have an answer. So you don't think that at some point we're going to put on our VR goggles and our bathing suit and go out to our garage and sit in the chair and pretend like we're at the beach. Not in my world, my world, your world is a metaverse man. What can I tell you? I, I you're asking the wrong guy. Yeah. You know, various uses for the metaverse in terms of business usage in. Okay. Virtual malls and those kinds of things. I get, I see, uh, a play for the metaverse in that, in that realm, I guess don't understand the metaverse as, as this escape, like you're going to put on goggles and pretend you're in another world. It's just it's, that's where life is going. I'm glad I'm old case and point. If you, you can wear goggles and think you're at the beach, or you can buy a home in Hilton head and be on the beach. Yeah, I think I'd prefer the second one. Yep. So you heard it here. Don't invest in the metaverse invest in Hilton head island. Yeah. Alright, come back next week and we'll talk about Bluffton and not the metaverse.