OCTOBER MARKET UPDATE
Alright, let’s take a seat for a moment and talk about what is going on in the wild world of real estate. The Fed, after its most recent meeting, made it abundantly clear that they will continue to raise rates until inflation is under control. We’re now seeing rates in the 7’s with expectations for them to reach into the 8's by the end of the year, possibly higher. Who knows!? While that’s bad news for buyers trying to keep their monthly payment down, there’s a bit of solace that comes on the flip side as competition recedes, making for a much less stressful buying experience overall.
Home prices have stayed relatively steady through the fall and there is still no indication of anything close to a crash. While we might see a small correction in prices this winter, any reductions that occur are unlikely to compensate for the increase in monthly payment to the buyer. It’s also important to note that different price segments will be affected in different ways. With ever increasing rent prices—starting in 2023, landlords in Oregon may legally increase rents by up to a whopping 14.6%—there may be more first time homebuyers motivated to get into the market in the lower price tiers. We might also see more activity from cash investors who aren’t affected by interest rates looking for investment properties to flip or turn into rentals, which tends to occur in the lower price tiers as well.
What’s a buyer to do, you ask? My advice: if you find a house that you love and can weather a higher monthly payment for the time being, take advantage of the lessened competition, get into your dream home, and look forward to the day you can refinance for a lower rate. If you’re wanting/needing to sell, strategy is everything. Homes that are staged like a Pinterest dream and priced appropriately still sell quickly. In this fluctuating market, however, timing will be another important piece of the puzzle to discuss. I’m always happy to go over your options with you and help you come up with a gameplan to buy, sell, or buy/sell—feel free to reach out if you’d like to chat!
Lastly, it’s important to remember that personal life circumstances are the ultimate driver when it comes to people deciding to make moves. Market conditions impact pricing and timeline for many individuals, but there will always be people switching jobs, relocating, downsizing, expanding/combining households, or any of the plethora of life events that motivate someone to buy or sell a house. So while the media loves to capitalize on the clicks from doom and gloom headlines, I’m always here to give an honest, accurate snapshot of today’s market and what to expect in the future. Knowledge is power!
In Summary:
› Due to low competition, now is a good time to buy *IF* you aren’t shopping at the top of your preapproval amount and are able to weather higher payments for a while before refinancing.
› For sellers, it’s important to recognize the market shifts and go in with realistic expectations. In the current market, staging and marketing are no longer just for drumming up extra competition, but can be what gets your house sold in a reasonable amount of time.
› If you are thinking about selling, sooner is better. As rates continue to rise throughout the winter , it will be more difficult to sell your home. Try to catch the small second wind of sales before the holidays roll around and after the Aug. / Sept. inventory slug.
› If your timeline to sell is flexible, I recommend waiting to sell until spring of 2023 and keep in touch with how the market continues to shift. Right now is a particularly dynamic time for real estate and there are still many unknowns. Even with a slow 2023, the spring surge will likely be more generous for you than the upcoming winter slump.
