Friday, March 10, 2023

Will the Spring Market Boom or Bust


For months the real estate market has felt like it’s been on life support as high prices and rising interest rates continue to sideline would-be home buyers. Sellers had little incentive to list their homes in the first few months of 2023 as home values appeared to be dropping to meet the expectations of the buyers. Buyers were frustrated by the uptick in the cost of money and sellers felt squeezed, unlike what they’d experienced just twelve months ago.


“Purchasing a home is now about 50% more expensive than it was a year ago for those who rely on a mortgage”.  Let that sink in... If you currently have a mortgage at 3% but decided to refinance that same mortgage at today’s rates, the payment would be more than double.





So when we say that mortgage rates have had a negative effect on the market, that’s what we’re talking about. Buyers who are waiting for a bargain price because they think that property values are going down may find that they’ll pay more because of interest rate increases. Even if prices do come down a little, most of those savings will be erased by higher mortgage rates.

Not trying to be Debbie Downer, because that’s so unlike me, but rates have been volatile – going back up over 7% last week. That’s a 20-year high, if you’re keeping track.  I won’t quote a current rate in this blog since they are constantly fluctuating and by the time you read this they would be different, but you might want to check out the Mortgage News Daily site below.

https://www.mortgagenewsdaily.com/mortgage-rates


So if you’re trying to time your move with the rates, I wish you ‘good luck’.  That’s like trying to time the bottom of any market. It’s very difficult to do. What most lenders are offering is a no-cost refinance within the two years after you purchase so that you don’t miss out on the house you really want.  And yet you’ll be able to take advantage of lower interest rates when things do finally settle down.  This is actually a very good marketing strategy - especially since the refinance market for lenders is virtually non-existent.






On a positive note, we’ve had a great first quarter.  Sales have been exceptional and we’re looking forward to 2023 being a really good year.  But I’ve seen these markets before and know how to maneuver through them. I firmly believe that the spring selling season will be busier than what we saw in the rainy months of winter.  Flowers will be blooming – which doesn’t sell houses – but they do help to add some nice curb appeal. Our main constraint right now is the limited availability of homes for sale.  For a variety of reasons, people are not selling their home, whether it be that they don’t have anywhere to go, they’re enjoying an interest rate of 3% or less, or their home is paid for and they don’t want to pack boxes. Who knows?  Traditionally the first quarter of the year is always lacking homes for sale.  It’s just a little more concerning this year because of the feds trying to slow inflation and taking it out on the real estate market.

My prediction is that we’re going to see a good spring and summer selling season. Sellers may  however, see buyers that are asking for repairs and credits – something we got used to not talking about over the pandemic-frenzy years.  One suggestion to avoid some of the escrow surprises are with pre-inspections.  Providing the buyer with a variety of recent inspections on your home and negotiating any would-be issues up front is a proactive way of having a smoother sale.  No home is perfect and the contract is “as is”, but it’s always subject to the buyer’s inspections.  By having the inspections done ahead of time, you can pave the way to a more seamless transaction. Call me, and we can discuss the most common inspections and the pros and cons of doing them ahead of time.






As we approach the spring selling season, if you or someone you know is looking for a hard-working Realtor with decades of experience and a great attitude, I’m available to help answer any questions about the market. And if you're ready, I’ll help make the process an enjoyable one.  Thanks in advance for your referrals!





Be sure to watch for ‘Coffee with Carol’, a livestream on Facebook that will look at what’s happening in our local real estate market, keeping you up on the trends and giving you an opportunity to ask the questions that you want answers to.

Send me a friend request and I’ll see you soon!





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