Now that we are knee deep (especially during Modim) into the chagim, we truly have no time to think about real estate and its fluctuating values we are all always concerned about. Whether it’s the meal preparations, company or the intensive, spiritual davening and shofar blowing, our lives are entrenched with praying for a wonderful, happy and healthy New Year!
OK, so as the realtor, the reminder and concern hovers when we have a moment to ponder. Questions or thoughts arise: Is it still a seller’s market, or turning into a buyer’s market? Are prices declining due to the rising interest rates, with the result of lower buying power for the home you’ve been dreaming about?
Summer 2022 has been a major change for the market across the nation. Housing affordability has plummeted to a 33-year low and existing-home sales continue to soften in the United States. Pending home sales continue to decline while new listings have steadily increased. This translates to a breath of fresh air whereby the frustration of not enough homes for sale has tempered. Unsold inventory is escalating, with frustrations of home builders slowing down new construction along with new-home sales.
Here we go … the scary term, inflation, with higher interest rates and fears of a potential recession has made an impact on buyers and sellers this past summer. It seems like a pattern at this time whereby buyers are saying they are choosing to wait and “see” what happens. No one has a crystal ball, but the cycles and hesitation of home buying are on the horizon. I dare say that some experts do believe the worst of inflation is nearing its end. Remember before and after 2008? Prices of homes were high, only to decrease drastically; buyers were paying inflated home prices, only to meet with reductions and disappointments.
So here are the gruesome facts, even though I caution it is not the time of year to worry about it. Single-family closed sales were down 15.9% to 1,314, yet ironically reflecting August 2022 single-family median sales prices increased 5.2% to $610,000. So we have a contrast of closings being reduced due to buyer reluctance, whereas the prices continued to escalate even as the recession keeps lurking as a threat in the fall.
No wonder the offer I just received for my listing, the buyer agreed to go up to the seller’s counter and then reneged since the Federal Reserve just increased their rate, scaring the buyer.
So, what does this tell us? Well, Hashem is always in control, but the time to buy is within the hearts and minds of the individual. The logic of avoiding a purchase now with the excuse of high interest rates may be valid, yet perhaps rates can go up higher.
We are evolving in housing as life evolves, yet it is becoming evident that the expectation of price growth is now minimized in the months ahead as the market continues to shift to a buyer’s market. So, depending on which side you are on, it could be good or bad news … but don’t get too comfortable or worried, since the cycles may shift again.
Wishing all a wonderful year, and don’t be afraid of prudent good choices, whether in life or in housing. And, overall, a house sells based on current market value fluctuations with the synergy and agreement of both buyer and seller!
By Ruby Kaplan