FINDING A PLACE IN 2023 HOUSING MARKET

 If buying, selling, renting, or investing is still in your plans as 2023 approaches, here are a few things to take into consideration.

1. Re-group - The uncertainties of the current economy should give those interested in 2023 a chance to regroup and evaluate before diving into 2023 housing market.  Interest rates, inflation, and inventory are still key factors to keep in plain sight.  Although closings are happening every day, assessing the risk factors and financial exposure will be critical for all.

2. Re-evaluate - For those current investors who have considerable holdings, the end of the fiscal year is an excellent time to re-evaluate the profitability of all holdings.  Properties that are putting a strain on cash flow may need to be sold in favor of a better return on investment.

3. Re-imagine - It is time to see "around the corner" with your short-and long term goals.  Is it time to re-imagine a stronger financial picture and fine tune the game plan to accomplish it with a refined strategy moving forward into 2023 and beyond.

4. Re-affirm - The game plan is still in play for the future. Adjustments have been made to move into 2023 better prepared for any contingencies that may come along the way. The next step is the first step towards executing - take positive action.  

Bottom Line

2023 offers a fresh start on a clean slate.  Now is the time to make history. 

THE LAG EFFECT

If you have been keeping a keen eye on the housing market, you have undoubtedly observed that in many of the U.S. Housing Markets inventories are beginning to increase.  However, all that glitters is not gold, many of these same areas still experience high home prices.  Why, you may ask, well let me explain.  It is  the Lag Effect.

The Lag Effect 

The Lag Effect is a real estate measurement of demand/supply dynamics in local housing markets.  Look at it this way: If demand exceeds supply, inventory goes down.  If supply exceeds demand, inventory goes up.

That sounds complicated!  There is another problem - the seller.   Often sellers are not sufficiently educated on the "ins and outs" of the housing market and are slow to react to changes in the housing market.  The result can be a delay of 12-18 months between the shift in inventory and the downward shift in prices.

Sellers who need to sell realize they need to reduce their price, but with rising interest rates and inflation, buyers and sellers are equally reluctant to relocate.  These are two other problems to contend with now.  

The Fed's highly aggressive rate increases have made borrowing costs more expensive across the economy, nearly doubling mortgage rates from a year ago.

Bottom Line

The pendulum will swing back as home prices retreat and inventory increases.  Interest rates and inflation will find a leveling off point adding to a new home buying up tick.   

DEALING WITH FLUCTUATING INTEREST RATES

Dreams of buying that first homes have been dashed by rising interest rates and inflation.  Is there any relief?

Today's interest rates are like an inverted roller-coaster.  You may be sick to your stomach just hanging in limbo trying to decide what is next.  Here are four things to consider in planning any future moves.

1. Interest rates will come down.  During the waiting period reassess your finances to be ready to move when rates are lower.  Calculate at what interest rate you can safely enter a purchase contract for that new home. 

2. Keep the lines of communication open with your lender of preference.  Communicating with your lender lets him/her know that your interest in purchasing a new home is real and that you are serious moving forward. 

3. Don't lose sight of your realtor.  Often buyers will drop off the face of the earth when the situation becomes too frustrating.  Avoid the urge and stayed connected with your chosen realtor.  As the market adjusts and sellers see the need to lower home prices, your realtor can alter you to any new opportunities.

4. Closing happen every day. In the moment that may not be of comfort, however, the fact that buyers and sellers are still making deals should be a form of encouragement that your closing could be any day now.  

Remember: Like many things in life, the housing market has its ebbs and flows.  While today may not be your day for buying, there will be that day for you soon.