We have seen the spring market heat up in all three counties. Spring always seems to bring the buyers out of winter hibernation; however, this year spring buyers we able to also take advantage of interest rates at an all time low and, for first time home buyers a $8000 tax credit as an extra incentive.

As the interest rates started to decline from its high at the beginning of the year, hitting an all time low at the beginning of May ‘09, the Long Island Real Estate market has experienced  an increase in buyer activity. Ever since that low interest rates have skyrocketed almost 1 full point in less the 30 days. As interest rates increase buyers are either forced out of the market or have to buy homes at lower sales prices.

Interest rates have a direct effect on the value of real estate as I discussed in an earlier post ( Permanent Link to What Causes Real Estate to Appreciate- ) that a one percent increase in the interest rate could affect the value of a property by as much as 10%. The good news is it looks like interest rates are falling again.