MARKET UPDATE: Pffffttttt! Like a balloon that is slowly losing air
The real estate market sounds like a balloon that is slowly losing air. Things are slowing down in real estate right now with fewer homebuyers, higher interest rates and not a lot of homes for sale. Part of this could be attributed to the seasonality of this industry, but it feels like it’s a bit more than that to me.
The biggest factors affecting the housing industry right now:
High mortgage rates (sitting around 8%).
Home prices appear to be stable, not like the pace of 2022.
Housing supply continues to remain very low.
The tech sector uncertainty may weaken demand.
Exodus of residents and businesses to lower-tax states.
Possibility of war-like conflict expanding.
What does all that mean?
We have high mortgage lending rates, which is psychologically and financially concerning for families, and even if a family can get beyond that, they are not able to find the right home due to limited housing inventory. So they are holding firm on finding the “right house.”
Other families are choosing to roll the dice and sit on the sidelines “until the rates come down” — which may not have proved a great idea if they have been waiting more than a year (when rates were near half what they are today).
Home prices are holding steady for the most part. I think that some sellers may have to lower their prices if they have not received an offer within 30 days on the market. If homes are priced right, then they tend to go pending on average within the first 18 days on the market here locally.
Then there's employment – the tech sector has announced layoffs, closings and some companies are moving out of state. It may not affect our local market that much, but even having one or two paychecks coming in just is not going as far as it used to.
I don’t feel that anyone can provide good insight into next year’s real estate market at this time. The variables of interest rates, recessionary pressures, possibly expanding conflict abroad and decreasing consumer sentiment may continue to keep our market slow and steady with very low inventory and much higher costs to home ownership.