Inventory is still low and buyers need to be ready to use slightly different tactics this year:
The National Association of Realtors® has noted the impact rising interest rates have on home buying. And while a steady interest rate will attract 2023 buyers- some are still waiting for the artificially low rates we had for 12-14 months. By all predictions, the uber-low rates are not coming back.
As interest rates and housing stabilize, buyers and sellers are learning how to price and negotiate again. In short -get ready for the springtime rush.
As the “days on the market” climb for most listings, buyers aren’t rushing to buy 5 seconds after a property is listed. During 2021 and 2022 buyers (and their agents) endured outrageous bidding wars and no negotiations, and often found themselves with no time to make decisions.
Today’s buyers have more options as we move back to a more neutral market. Yes- some homes sell within minutes of hitting the market but the majority are sitting longer than in the past two years. Buyers are moving back to inspections and some sellers actually have to negotiate the price.
As we lean toward a more normal/neutral market- not heavily favoring sellers or buyers-lots of contract items are now being negotiated. Buyers are once again (on the majority of sales- there are always exceptions) performing whole-house inspections, and radon and sewer line tests. No more waiving appraisals. In short, the entire purchase contract is in use.
Sellers are learning to deal with buyers’ requests. Pricing, while still artificially high in some spots, is often adjusted downward at 2 weeks on the market. Homes not appraising are popping up here and there usually requiring a price reduction. Homes with significant problems during inspections are being fixed or prices lowered to get the deal done.
Maybe we should think of 2023 as a year of realistic expectations. Real Estate appreciation will continue but not at unsupportable rates- +16% a year is unsustainable. Buyers also need to get more realistic about prices and not overspend now and end up with financial problems later. Maybe pricing and style for your next move need to scale back just a little.
Sellers terrified to put their home on the market without having the next move lined up may find buyers willing to give them extra time for a price. Check with your Realtor® about the availability of “temp housing” and if you are building a new home- some builders have contacts with apartment complexes. Like buyers, you may have to adjust your expectations for pricing, and timing in order to make a move. Don’t be afraid to ask your Realtor® for assistance.