Happy New Year!
I hope this post finds you well and in good spirits after a rather chilly holiday! The numbers are in on 2022, and I am pleased to say that the team topped $100M in sales for the second consecutive year. It takes a lot of work to sell as much real estate as we do, and we also know that it takes a dedicated team of administrative staff and a loyal client base, and, as always, we are grateful for both! 2022 was all about the three I’s – interest rates, inflation, and inventory. Let’s dive right in and talk about all three before I get to the specifics of the market and the good news for 2023!
Interest rates and inflation
Mortgage interest rates fell to record lows in 2020 and 2021 during the Covid pandemic. Emergency actions by the Federal Reserve helped to push mortgage rates below 3% and keep them there. The story changed in 2022. With inflation running ultra-hot, mortgage interest rates surged to their highest levels since 2002. But rates have cooled off. And if the Federal Reserve decides to slow down on rate hikes, as Fed Chair Powell hinted on December 1, we could see further declines (or at least a leveling off) in the future.
As a borrower, it doesn’t make much sense to try to time your rate in this market. My best advice is to buy when you are financially ready and can afford the home you want regardless of current interest rates. Remember that you are not stuck with your mortgage rate forever.
A lack of housing supply in Delaware continues to dog the housing market as inventory is shrinking. There were only 4,212 houses for sale in September 2022, including 1,515 newly listed homes, accusing declines of 3.7% and 17.9%, respectively in a year-over-year comparison. There were only two months of housing available, unchanged since last year, a far cry from the five to six months necessary for a balanced market.
The good news for buyers and sellers
A lack of inventory will always favor the sellers. If you have a house that you are considering selling, now is the time to list the property for sale before more competition enters the market in Spring. If you are a buyer, and you can afford the home you want, less competition for that home means better terms for you; home inspections, sellers closing cost assistance, financing contingencies and other concessions are now the norm.
Lawrence Yun, the Chief Economist for the National Association of Realtors gave his market predictions during the 2022 NAR conference in Orlando. Among other things, Mr. Yun states:
In 2023 Yun expects home sales to decline by 7%, while the national median home price will increase by 1%, with some markets experiencing price gains and others price declines.
He also projects a strong rebound for housing in 2024, with a 10% jump in home sales and a 5% increase in the national median home price.
Here is a link to the news article: https://www.nar.realtor/newsroom/nars-lawrence-yun-predicts-us-home-prices-wont-experience-major-decline-could-possibly-rise-slightly
Waiting until 2024 means more competition for both buyers and sellers. NOW is the time to buy and sell and you can trust me to guide you through the process. Having been exposed to hundreds of real estate transactions and over $200M in sales volume in the last 2 years, I know what it takes to negotiate the very best deal and I understand the market. For more information, or if I can assist you anywhere with your real estate needs, please don’t hesitate to call me today! I wish you and yours a very happy and healthy New Year!