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Spring 2023 Real Estate Market Update

2/15/2023 By Rocky

Since my fall recap, prices and closings has continued to slow down as predicted. However, in feburary, we are suddenly seeing an influx of buyers as our listings as well as other listings go under-contract. This information won't be reflected on official data for a few month and it could be an area specific rather than state or country wide.

Despite mortgage rates still elevated, we did see it come down from the peaks late last year. Odds are rates are gonna stay in this area for a while. So should you buy down rates? Only if you need to inorder to qualify for mortgage because in a couple years when inflation is tamed, rates are likely to come down to refinance.

Should I buy a home in early 2023? Despite higher interest rates, we still have plenty of people still have money and are worried about inflation eating away at their savings or having to pay rent. In Georgia, we have another problem of out of state wealthy buyers. They are taking advantage of the shifting work from home culture to buy relatively affordable and safer southern suburban homes. We could easily see a situation where desirable area continue to suffer from low inventory and rising prices as out of state buyers price locals out of the market. So if you can afford something that you like now, it could be prudent to not hesitate before the spring fully uncovers a new year of the real estate market.

Selling a home in 2023 is going to depend on your location and furnishing level more so than during the pandemic boom where everything flew off the shelf. Even if out of state buyers can afford to purchase something doesn't mean they won't pay attention to mortgage cost out pacing rent prices. A lot of our potential buyers are content living with friends and family without the FOMO of the pandemic boom driving them to buy. We are looking at a balanced market in 2023 with some upside in desirable locations. So be patient, make some reasonable updates, and have reasonable expectations prices may not return to recent highs anytime soon.

Renters: I always encourage home ownership. Home owners get homestead exemption on property taxes and don't have to pay capital gains tax on a large amount of profits when you sell. Last fall was a rare time that I didn't because falling prices were almost assured. If you are staying in an area for more than 5 years, and you can qualify to buy something, you definitely should!

Happy Holidays from our family!

Things to look out for in 2023 A lot of homes went off market late last year as things slowed down. Will we see those inventory come out en mass in the spring to give buyers more options and negotiation power or is the pent up buyers going to digest the inventory again triggering another bout of FOMO buying for anything that hits the market?

If interest rates were the sole judgement of real estate prices, we would have seen prices drop down 40%+ but it only came about about 15%. Interest rates are likely to stay around 6% for the foreseeable future. Work from home allowing out of state work has taken outstanding amount of driving force into the current market condition as 'overpriced' homes staying on the market through the winter still goes under-contact with some of the slower reacting out of state buyers unbothered by higher prices.

Prices went up across the board during the pandemic after an initial 'crash' in high density areas. During the housing recession last year, we still see resilient prices in desirable areas although contract terms are not as forgiving for the sellers. In 2023 we will likely see price trends more dependent on location rather than a broad based change in the past.

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