State of the Market Q1 2023

Main Considerations About The Market

Even with lending rates off their ultimate highs, there has been continuous speculation as to how interest rates will ultimately affect home prices. In any type of market there are always pluses and minuses to navigate through. If you were a buyer over the last few years, competition was fierce. If you were not prepared or positioned to offer well over the asking price, your odds of securing a home were slim. Today, you may be competing with other offers, but the level of competition is manageable in comparison. Of course, if you are a seller, you may not be getting the highest price in history, but you are still well above pre-pandemic levels and continuing to enjoy the last ten years of appreciating prices. Even if you are selling and making another purchase, the increased interest rate is likely not as painful as paying 5-10% over the asking price.

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Less Pressure Than Before

Today you are securing a home, at a slightly more comfortable price point, with surely less pressure and positioned to refinance as interest rates find a more level ground. The rise in interest rates may likely continue to affect demand and create affordability issues for some buyers. For prices to make any sharp and meaningful decline, inventory levels will need to significantly increase. This is something we are not seeing currently. The shortage of homes for sale has been an ongoing topic for our area.

What Is Next For Prices?

With inventory levels expected to remain at these subdued levels, I don’t foresee interest rates having as profound of an effect on prices as Buyers might be hoping for. As we proceed into the year, I anticipate our real estate market to return to a more normal and seasonal flow of activity, with February through July being the busier months. The shock of increased interest rates will likely dwindle as buyers digest and deal with our new market. I do however foresee rates settling in lower as the year progresses which will further help prop up home prices. The reality is people want to buy homes and the new activity we have seen in just the last few weeks should be good indication of another positive real estate year!

What's Next for You?

As always, we will continue to keep you up to date on the happenings of the market. If you’re thinking about making a move this year, contact me to learn how changes in our local market could be exactly what you’ve been waiting for. We invite you to explore our listing portfolio, or schedule a time to talk.