The Christmas Holiday will be upon us before we know it. Our calendars are full of holiday events and an annual real estate slowdown seems to appear as we close out the year.
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In speaking with a lot of agents, 2022 was an odd year. We started the year with previously unforeseen buyer demand and record low levels of available homes for sale. It was the perfect seller’s market. Homes were selling for record prices across all price points. Many experienced agents, like myself, wondered how long this breakneck pace could continue to exist. When would the headwinds arrive? In the early part of 2022, the backdrop for a strong real estate market was present. The stock market was booming. Interest rates (usually known as the cost of money) were still close to their all-time lows. Buyer demand was unprecedented. We knew this perfect storm had to end. The stock market never goes up forever. Interest rates most likely would not go to zero, and something had to happen to weaken buyer demand. And 2022 bought us the answer to that question. Starting in the late Spring, The Federal Reserve started to raise interest rates. Mortgage rates went from the high twos into the sixes. And that was the damper we all knew was coming. (If only we knew when, is a different story.)
By the time summer rolled around, buyers had become a bit more cautious with their offers. And the effect of higher interest rates started to impact a buyer’s ability to finance a home. When the fall rolled around, we saw the early signs of a real estate market becoming more in balance. Supply, or home choices, remained slim in many price points, but the cooler demand has made the supply/demand equation more balanced.
As we close out the 2022 real estate year, we are seeing slightly lower interest rates, and still cautious buyers. BUT buyers are out there, and they are buying at all price points. However, buyers are not simply throwing out outrageous offers to secure a home. Today’s buyer takes their time and makes a prudent offer. And sometimes this buyer will avoid a multiple-offer scenario altogether.
Said differently, “It is not March anymore”. If the cold weather and shorter days don’t remind you, the real estate market will. Gone are the days of a dozen or so offers on a house, with one crazy offer after another. Multiple offers these days are closer to something in the area of two or three offers and no longer a half dozen to a dozen. And price? Well, that is another story. We have yet to see a price revision or erosion. But surely have seen the high-water mark. Homes that hit the market that are priced highly, seem to linger on the market. Well-priced homes seem to still sell quickly. But quickly is a matter of weeks, not hours like we saw in the early part of the year.
Next week I will offer my views on 2023! Thanks for visiting my blog.