Is It A Good Time To Buy or Sell?
In a volatile market with inflation at a 40 year high, a lot of our clients are coming to us asking if it’s still a good time to buy or sell? As consultants who study the market closely, we look at data to tell us where we were and where we are today, to hopefully paint a picture of where we will be in the next year.
Now for seller’s, it’s still a great time to sell as there is still a backlog of buyers who need to purchase a home. There has been a rise in inventory throughout this year and all data suggests January was the height of this sellers market, but inventory is looking to have peaked for the year, and we are going to go into Q1 with lows similar to 2022.
Now, with fewer buyers in the market and mortgage applications the lowest they have been since 1995, pricing has become more important than ever since buyers are being more selective. How do you create demand? Thorough pricing! If you’re selling you need to price your house aggressively and ahead of the curve. If that is done properly, your home still has high chances of selling quickly and with multiple offers. Ultimately if you are pricing your home where the highest sale was six months ago, you will most likely be looking at a price reduction, but there is still an opportunity to pull out much more equity than you would have been able to even just two years ago.
For our buyers who are asking if they should get into the market, it isn’t as cut and dry. If you have a home to sell and need to move, I’d say acting sooner rather than later will be key. You’ll be able to still get a great price for your home, and will have less competition on the back end, as 40% of homes on the market are seeing price cuts, and on the ground we are seeing seller concessions coming back and more contingencies to protect your purchase.
There is no way around it though – Buyers are constricted right now due to rising rates, and there are no indicators pointing to the rate going down. The Federal Reserve has already told us they will continue to raise the short term interest rate until inflation is reduced to 2%. As you can see in this graph, inflation is still well over 8%, even with the multiple rate hikes this year – so we can assume this is going to continue for at least another 12 months until inflation is controlled.
Now if you’re renting and it’s time to renew or your debating on buying, it’s important to note that The average net worth of a renter is 8k, while a homeowners average net worth is 300k – I’m sure you’ve already seen the 8% average increases in rent this year so far, and 72% of landlords plan on raising the rent again in the next year – with most rents outpacing the average mortgage payment for the first time homebuyer.
So my advice to renters would be: buy and lock in a rate now with a fixed monthly payment, and start building wealth through real estate instead of battling with ever increasing rent hikes. If you have any questions or want to connect with an agent, fill out the form below and a member of our team will get in contact with you soon!