The financial markets ended the third quarter with some good news. The Federal Reserve reduced the Fed funds rate by half a point. While the cut had been telegraphed and mortgage rates had largely priced in the move, there was still a brief period of optimism. Real estate stocks rallied along with other rate sensitive sectors, and it seemed to be the beginning of a new market. Just a few short weeks later, the “sure-thing” of another half a percentage in cuts by the end of the year was not so certain. The latest inflation figures came in a little hotter than expected, bond yields increased, and there is a definite chill in the market’s air.
Dawn Condominiums had a couple sales in the third quarter, one less than this time last year. Dawn Condominiums are a vacation rental friendly property, so units have income potential. Unfortunately with current pricing, rental friendly properties are having a harder time cash flowing with debt service, given higher interest rates and higher down payment requirements.