What the Spring 2023 Market means for Buyers, Sellers, and Home Prices
As we approach the spring season, prospective buyers should anticipate a more composed market in comparison to previous years. while competition for attractively priced homes will persist, the overwhelming crowds of buyers clustering around open houses, which was characteristic of 2021 and early 2022, are expected to diminish. the modest reduction in mortgage costs since October could stimulate demand following the downturn experienced last autumn, particularly in cost-effective markets and residential areas. Nonetheless, the extreme competition witnessed in the past couple of years is unlikely to make a comeback.
As we enter Spring, the housing market is facing a familiar challenge: a scarcity of homes for sale, mirroring the record-breaking shortage experienced in 2021, a period characterized by intense competition among buyers and soaring prices. Despite this similarity, there is quite a shift in the market dynamics compared to the demand that drove bidding wars in early 2021 and 2022, predominantly fueled by ultra-low mortgage rates. Today, as we collectively navigate the ever-evolving terrain of the housing sector, it is essential for potential buyers and sellers to remain cognizant of the shifting dynamics that continue to shape market patterns and expectations.
What this Means for Buyers
This year’s buyer motivations arise mainly from life-altering events, such as securing new job opportunities, tying the knot, or welcoming a newborn into the family. Consequently, homebuyers exploring affordable markets will continue to face keen competition, particularly within the lower price brackets. It is essential for prospective buyers to recalibrate their expectations, turning their focus to the long-term value of their investment rather than seeking a once-in-a-lifetime mortgage deal.
What this Means for Sellers
Homeowners seeking to sell their properties should be mindful of the need for accurate pricing and effective marketing strategies. While certain listings have the potential to garner substantial interest and prompt offers within their first weekend on the market, a significant portion of homes – 22% last month alone – require price reductions in order to successfully sell. Consequently, homeowners should be cognizant of these crucial elements when strategizing on how to effectively sell their properties
Housing Market Trends
Contrary to common expectations of either significant price declines or radical increases, housing market trends showcase a more stable, steady growth pattern moving forward. It is predicted that after the typical seasonal dip in winter home prices, values will experience modest growth as we approach the spring months. Therefore, both buyers and sellers should make informed decisions based on this measured growth and avoid relying on extreme market fluctuations.
While the resurgence of activity in the housing market over the past couple of months has been encouraging, what awaits remains uncertain. Mortgage rates are going to be a key factor in determining which direction it takes. If rates move lower, toward 6% or below, demand for housing is expected to go up as more people choose to purchase properties.
Conversely, if mortgage rates stay in the upper 6% range or higher, it may push buyers off the market and even put a damper on homeowners wishing to sell. Inflation and unemployment can also play a role in influencing the direction of housing markets, yet their impact pales in comparison to that of mortgage rates.
The promising economic news we witnessed earlier this winter sparked optimism for a gentle deceleration of the economy and housing market, instilling confidence among investors and homeowners alike. However, it is crucial to remain vigilant, as the looming threats of heightened inflation or a potential recession have not been entirely eliminated. As we continue monitoring economic indicators, it is essential that businesses, homeowners, and policymakers proactively strategize and adapt to prepare for any unforeseen shifts in the market. This unified effort will be instrumental in navigating unforeseen changes in the market, ultimately laying a solid foundation for sustained stability and growth in the long term.
ABOUT JIM THORPE & SUMMIT CAPITAL PARTNERS
Jim Thorpe is a Seattle-based entrepreneur And real estate expert with over 30 years of experience in real estate development. He works to find high-demand properties in low-inventory areas for both developers and homeowners alike. One of his specialties is locating single-family homes in property parcels zoned for multi-family development. His rental portfolio now includes houses, apartments, and commercial properties. Thorpe’s dedication to his business has led to city-wide growth and development in the real estate sector.
Summit Capital Partners is a real estate development and management firm that operates out of Puget Sound and is owned by Seattle real estate expert, Jim Thorpe. They work to acquire off-market real estate and specialize in developing risk-adjusted solutions, allowing an asset’s value to increase over 6-12 months. Summit Capital aims to make a difference in the community where they do business.