Evaluating Today’s Real Estate Market In 2023

How’s the Market? It seems like everybody I meet who knows I’m a Realtor want to ask me that question as soon as they see me. Yet it wasn’t always like that.

Ever since we got over the mortgage crisis in 2007, 2008, people seem to be focused on how much their home may be worth in the same way they used to watch the stock market. And this obsession with home values has been driven by what appeared to be ever-increasing sale prices, driven by buyers being able to capitalize on low interest rates and multiple offers due to insufficient numbers of homes for sale.

For homeowners, it appeared that this was always good news. Every month they could watch their home equity increasing, and this information was easy to find, with many websites providing automated home valuation models based on recent sales of similar homes.

But as many people began to realize, a situation like this couldn’t last forever. Rising home prices resulted in an overheated economy and the Federal Reserve took steps to start cooling it down. Multiple interest rate hikes over the past year have had a major effect

on the housing market, not least because buyers can’t qualify for the loans they could, and even if they were able to, they couldn’t afford the monthly payments.

You would usually think that this would mean that there would be a surplus number of homes for sale, but since so many homeowners have their existing mortgages at extremely low rates, unless they can buy their next home for cash, or they are in a position where they have to sell for some reason, they are just not willing to move.

When Will It Be A Good Time To Sell?

There are really two possible answers to this question. I’ve always taken the view that the right time to sell is when it makes sense from a life event stand-point. I’ve always considered a house primarily as a home rather than an investment. But unlike renters, homeowners have the major bonus of increasing equity. I personally believe that the best time to sell is when some life event makes sense to do so. If your chidren have left home and you don’t need a large house any more, if you are getting divorced, or you are ready to retire to another state where you can enjoy a better quality of life or be near your grandkids, or because of a career move – all these, in my opinion, are very sound reasons to sell.

The second answer, is when it makes financial sense to do so. In this scenario, you may be waiting for interest rates to come back down to a low level and for home values to get back to increasing in the same way they have in the past. The problem with that approach is that it may not happen for another twenty years, if then. The question is, can you really afford to wait that long?