Many people have concerns about where the housing market is headed as 2022 closes and 2023 approaches. 2022 marked a shift from the rampant activity of 2020 and 2021, and many people have questions about how current factors, such as inflation and rising interest rates, could impact the housing market in the short-term future. Despite the unique set of challenges that the current market presents for both buyers and sellers, 2023 could still be a good time to consider buying a new house or selling your current home. This article will explain in greater detail what is currently happening with the local and the national housing markets. If you still have questions after reading this article, reach out to the Fowler & Sakey Team, who will be happy to assist you.
1. I’ve heard average sales prices are down. Is this true?
It is true that the national housing market finds itself in a slight downturn. This is to be expected to some extent. Home prices often drop during the fall and winter after a season of busy activity in the summer. Buyers are usually more motivated to move during May, June, and July. The market can stay hot through August but usually cools down in September and October.
That said, there are undoubtedly unique factors in play this year. Most people are well aware that inflation is currently as high as it’s been in over 40 years. The rising cost of living puts an additional strain on many people’s budgets. It’s also hard for many potential buyers to get excited about taking out a loan at a 7% interest rate when they could have had a similar loan at an interest rate closer to 2% less than two years ago. Combine these issues with a general state of uncertainty about the future of the national economy, and you can understand why home prices are down in many places.
2. Is the Easton housing market suffering in the same way as the national housing market?
The Easton, CT, real estate market remains competitive despite the current economic climate. Home prices have risen over the course of the past year, although they are down from earlier in the year when they were at their highest. Usually, homes sell within one month after going on the market. They regularly receive multiple offers and sell for a price higher than the listing. It remains to be seen if the economic struggles felt throughout the nation are experienced in a greater way in the Easton area.
3. When can we expect things to improve?
Inflation and interest rates are certainly high right now. This has happened before, and these numbers always tend to fall back to their past averages. The big question is when to expect this to happen. Unfortunately, nobody can predict with any degree of certainty when things might begin to slow down. The Federal Reserve has stated a desire for interest rates to come down in the future. They acknowledge that a lower interest rate makes the market more sustainable and favorable for both buyers and sellers. Perhaps the rate will begin to come down sometime during 2023, but inflation will likely have to slow down before the interest rate can begin to change.
4. How bad will the downturn be?
It depends on who you ask. Some industry leaders believe that prices won’t fall much — if at all — during 2023. Others think the problem could be more significant and that home prices may fall as much as 6% in 2023. Despite concerns such as these, the market remains in a solid overall position. The odds of a full-on market crash or a significantly prolonged downturn are unlikely. A key piece of evidence to consider as a part of this discussion is the current mortgage delinquency rate. Right now, this number is as low as it’s been for over 25 years. Many industry leaders believe a higher mortgage delinquency rate would suggest the market is in trouble. A low rate is an encouraging sign.
5. Is 2023 going to be an excellent year to get involved with the market?
You may be reading this article and wondering if 2023 will be a good year to buy or sell a home. The answer largely depends on your unique context, but there’s no reason to say that the market should be avoided altogether. Sellers would prefer for prices to continue rising, but despite the slight recession, prices still remain significantly higher than they were only a few short years ago. In the meantime, buyers can take advantage of a short stall in price increases and less competition than they may have encountered if they were shopping for homes a few short months ago.
6. What’s the best way to get ready to buy or sell a home?
The first step in getting ready to buy is to understand your current level of financial health. Reach out to a lender to discuss what sort of loan you can qualify for. Your lender can provide you with a preapproval letter that you’ll probably need to show a seller before they will accept your offer to buy their home. If you’re thinking about selling, reach out to your agent and see if they can provide you with a Comparative Market Analysis of your home. This report will give you a better idea of what sort of price you could command based on recent sales in your area.
7. Who can help me shop for a home?
You can trust the Fowler & Sakey Team to help you buy or sell homes regardless of what the market is doing. They take time every day to study current trends and happenings within the Easton, CT, real estate market. They use this information to educate their clients about how to proceed with wisdom and make the best possible decision. Reach out to their team if you have more questions about the current state of the market or if you’re ready to take the next step toward buying or selling your home.