The Fed hike is expected to put pressure on the real estate market but New Yorkers seem "unaffected." New York City homebuyers and owners have been hearing about a possible interest hike for years. So, when the Feds announced last December 16 that it has increased its benchmark interest rate by 0.25 percent and that they would increase rates by about 1 percent each year over the next three years, it didn't surprise New Yorkers at all.
"Buyers have been hearing about the possibility of interest rate hikes for so long that they aren't really reacting -- not yet, anyway," explained Stacey Max, a sales manager from BOND New York.
Margo Mohr, an agent from Fox Residential Group, agreed with Max's opinion. She asserted that the 0.25 percent jump "shouldn't really make a difference."
"Those people who want to finance a purchase have not lowered their purchase limit, but it is somewhat early," Mohr said.
In recent years, the Manhattan and Brooklyn markets have been dominated by cash buyers due to the markets' limited inventory and high demand. Following the Fed hike, those buyers also remain "unaffected." As a matter of fact,more than half of Manhattan residential sales during the third quarter of 2015 were cash deals. According to real estate appraisal firm Miller Samuel, this year's rate is 43 percent higher compared to 2014's third quarter.
"There has been a lot of hyperventilating about whether the Federal Reserve would raise the Federal Funds rate. It's been a long time coming but so was the last good 'Star Wars' movie ," Miller Samuel foundation founder Jonathan Miller wrote in their weekly newsletter.
Following the housing collapse in 2008, the Federal Reserve cut rates to near zero to help the failing economy. By comparison, the Federal Funds interest rate in 2007 was 5.25 percent.
