Goodbye 2022. We are ready for 2023! We’ve lived through considerable challenges these last three years with inflation in the forefront running at a 40-year high, and Covid hangovers splicing into a variety of flu and mystery viruses. The doubling of mortgage rates in a single year proved to be a real test to the housing market with successive Fed rate hikes starting in the spring with increments of 75 basis points each time before dropping to a .50% increase on December 1. The next Fed uptick will be announced February 1. If in fact inflation ebbs, and unemployment numbers rise, as expected, a recession will likely follow. While not everyone agrees when and how deep the contraction will be, the prevailing opinion is it will be short-lived.
Our team has been busy with buyers who are buying up the last of the remaining 2022 inventory and with sellers who are getting ready to list their homes in mid January. We see a more balanced market at parity, with sellers pricing fairly to attract early interest and purchasers looking for value. Deals are getting done by smart buyers who are finding they have greater negotiating power with fewer purchasers on the scene. Many are paying cash. Others are locking in a price and planning to refinance in 18-24 months. Sidelined buyers, however, who are waiting for mortgage rates to come down, may face increased competition next spring with far less negotiating power.
There’s an unevenness in this market, as in most, so it is important to evaluate each buying and selling opportunity individually with an expert. Properties in need of renovation are struggling; rising carrying charges and assessments and dwindling building reserve funds are giving buyers pause; co-op boards are taking an even more granular review of sale applications.
What lies ahead? The jury is out, and there’s no consensus of opinion on our whiplashed economy. A more appropriate question is, where do you see yourself in 2023? If you’re ready to explore your next housing steps, call us. We help to turn dreams into reality. It’s our mission.
Thank you for reading and sharing our musings with friends and family. We wish you happy holidays and a joyful New Year!