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.
Seascape Condominiums saw an equal number of sales in the third quarter this year and last, with list price per square foot dropping. Seascape 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.