The most popular question we get is,
"What is going on in the Real Estate Market?"
Followed by "What Happened?" and then "What's going to happen Next?"
Let's start by Looking Back at Interest Rates in 2022.
In January of 2022, Rates where at 3.1%
In an attempt to get Inflation under control, the Fed began to raise rates.
By October the Rates hit a 12 year High of 7%
This caused the Real Estate Market to Slow Down Rapidly.
A Buyer wanting to buy a $500,000 with 20% down would have a $400,000 loan.
The difference between the 3.1% loan and the 7% loan is $953 /month.
Many Buyers No longer qualified for the loan.
This had a huge affect on Home Prices.
Median Sales Prices had been on the Rise.
In 2019 and 2020 they were $300,000
In 2021 they hit $343,000. Up around 7% per year.
From 2021 to 2022, Prices went up 27% to $435,000
In 2022, Prices were Up 12% by May.
And that's when the Interest Rates went above 5%.
Since then, Prices have dropped to $420,000, down 14%
This had a huge affect on the Number of Closed Sales.
Over the past few years we had been
averaging around 8,000 transactions a month.
In December 2022, we only had just over 4,000.
Fortune Magazine writer Lance Lambert wrote an article compiling
the Housing Forecasts of 27 of our Nations leading Housing Researchers.
Of these 27, only 4 thought Prices would go Up.
The most optimistic was Realtor.com who said prices would rise 5.4% in 2023.
At the opposite end where Zonda, AEI, CoStar, KPMG, Yieldstreet,
Pantheon and John Burns RE who all stated
Home Priced would drop between 15% - 20% in 2023.
The year ahead is a question mark. With the FED poised to slow (not stop) interest rate hikes we will see how this effects buyers loans moving forward.
If you or someone you know is considering making a move,
please give them our number and discuss options.
