Check out the livestream replay here!
The housing market has definitely shifted – It’s time to PIVOT and CHANGE. Do you know what to change in your investing biz or are you operating the old way….just hoping.
Market Shifts approaching 2023:
- Days on Market for Listings up 25%
- Overall home sales are down roughly 30%
- Inventory is up, but there are less buyers
- Less bidding wars – more choices
Most of this is due to inflation and the rise in mortgage rates over the last year.
Housing affordability is a big concern. Even those who can afford higher payments are feeling the pinch.
So, what to do when there are drastic changes in life and business that give us the feeling that the sky is falling? Do we stick our head in the sand and hope our problems go away?
NO!!! WE PIVOT!!! Pivoting is something that all successful people do with ease.
Want to know how to pivot successfully?
In this video you will learn the following…
1. Should you reposition your money and assets?
2. Should you be concerned about the current mortgage rates?
3. Are we in a Recession now?
4. The predictability of inflation – What to expect moving forward.
5. What is a “buy down” for a mortgage and what options make sense for YOU!
6. Will the property values go up or down in the next couple of years
7. And so much more…
Shifts we may see in the Housing Market for 2023
1. Spring Market may not be as Busy as Normal
The 2023 spring market activity will likely be not as frenzied.
Rates are higher than they have been in 10+ years and prices are still holding on due to low inventory. Affordability will be an issue that will cause more buyers to wait. Less demand could equal less of a frenzy.
2. Inventory will Increase, but will still be very low
Inventory levels have come up steadily over the past few months due to less demand. Properties are staying on the market longer. However, we are still at a historically low mark and well shy of the pre-pandemic inventory levels.
Inventory will stay low because new construction is down significantly. Also, some sellers are not wanting to give up their 3% rate for a 7% interest rate.
3. Affordability will still be in issue
The Affordability Index (measure of what an average buyer can afford) has been low. Everything from gas to groceries is reducing a potential buyer’s monthly personal cash flow. What a buyer could afford just a few months ago is far less and housing is big part.
The good news is we should continue to see a downward trend in the inflation rate. Yet, we have another year or longer before we start getting back to the typical 3% inflation rates, we are accustomed to.
4. Price Declines, but not 2008 crash craze
We have already started to see some price decreases as the buyer demand has gone down. This should continue into 2023 until inflation is brought back to a more normal level.
Will we see a “2008” type of crash in the housing market? Not likely since there are many factors that don’t line up with that crash. Homeowners have far more equity than those back then. Inventory levels were off the charts in 2008 as new construction was booming. Plus, lenders were willing to lend money to anyone regardless of finances.
All of these factors are not the same now. Low inventory levels will not allow a crash. New construction has not kept up over the last 10 years and won’t catch up anytime soon.
So, we may see more price drops as the market goes through a small correction. We actually need this to stabilize how crazy things have been.
5. Mortgage Rates will continue to rise, but there is an end in sight
Inflation will drive the rates. The trend is in the right direction, but rates may continue to rise until inflation is under control. It might be summer before we are confident rates will stay down. Yet our new normal could be around 5% and not 3% in 2024.
6. Rents may start to decline for a short period of time
The demand for apartments has declined for two straight quarters. This could signal a decrease in rents. Also, the rental market usually runs side by side with the job market which could decline soon. It has remained strong, but the Federal Reserve is trying to increase unemployment to curb inflation. If this happens it would be another sign that rents could decrease.
It looks to be a short-term decline, though, since the Fed will take their foot off the gas quickly. The current very strong jobs market should recover fast.
Don’t forget, I lead the Encore Investment Team of Realtors. We will guide you along the path of successful investing. See below to book a strategy session.
Click Here to Watch it Now
Join LeAnn Riley’s Real Estate Investing Made Simple Club. Click here to join