Here we are in 2023…and we are most certainly not in that same place as we were this time last year when it comes to the real estate market. Mortgage rates have climbed at a rapid rate to combat inflation, and we’ve seen the housing market respond as we’d expect. It’s been a tough adjustment period, but ultimately, we are feeling a shift away from the intense sellers’ market of early 2022 toward a more balanced market.
With this shift, buyers’ primary struggle is now affordability rather than availability. Demand is falling, inventory is rising, and homes sit longer on the market on average. But what can we expect in this year ahead, and what does it mean for those of us with real estate goals on our 2023 vision boards? Let’s look…
Economists continue to study inflation and make predictions about what our government will do with interest rates as we move into 2023. While they may continue to rise, we may also see them fall a bit at times, albeit at a much less rapid rate and in less drastic intervals as we saw last year. We all wish we had a crystal ball, but the truth is that no one knows for sure what is in store for interest rates in the coming year.
Does this mean 2023 is a “bad time to buy a house”? No. Real estate ownership can be a great investment during times of inflation or recession, as it’s been known to be a long term investment that generally appreciates over time, even with short-term highs and lows in between. You may feel like you need to watch and “time” your purchase or sale right with the changing market, but ultimately, a home purchase or sale needs to happen when the time is right for YOU and your family.
If a move is on your radar for 2023, reach out to a trusted real estate professional and have a conversation with a recommended lender (I’ve got great contacts!) to find out about loan products available now that can help make the home of your dreams affordable, even while interest rates remain high. A refinance down the line is always a possibility, and your lender can assist you in creating a short- and long-term plan for home ownership.
In addition, if you were among home buyers last year who struggled to find a home due to lack of inventory, and then lost out on house after house, even when bidding well above asking price, due to intense competition, you may be in for a breath of fresh air this year. Higher interest rates have lowered demand, increasing inventory and giving buyers more negotiating power in transactions. You’ll have an opportunity to take more time to make thoughtful home buying decisions and make offers less based on emotion and desperation and more on current data and balanced compromises with sellers.
In 2022, we saw a steep increase in home value, which has many concerned that we’re bracing for values to plummet this year. However, economists actually predict home values will be fairly stable, especially in areas that have been consistently desirable places to live. You are more likely to find a “deal” in a slower market like the one we are experiencing now than you were last year with increased buying power, but sellers are still likely to profit from increased home values in desirable markets. Reach out to your trusted real estate professional to discuss trends specific to the area or neighborhood you have your eye on!
I’m personally looking forward to an overall more balanced market this spring with excellent conditions for helping more families fulfill their 2023 real estate dreams! If you are thinking about buying or selling in the new year, give me a call and let’s set up a consultation…time to chat about your goals and create a plan that works for achieving real estate success for you and your family in today’s market conditions. I’d love to help! 704-792-8768