The housing market is constantly changing and shifting, especially over the course of the past few years. In 2020 and 2021, low interest rates prompted many people to shop for a new home. Sellers capitalized on the increase in demand, charging more for their homes and often choosing from multiple offers above their initial asking price. Times have changed, and the market is not invincible to the general economic uncertainty that exists in the country right now. Many wonder if inflation will ever slow down or when interest rates will come closer to average numbers. All of these are important issues for anyone who is thinking about buying or selling a home over the course of the next year. This article will help you better understand what the future may have in store for the Rye real estate market.
1. What is the market doing right now?
The market in Rye Brook remains competitive. Most homes only spend two or three weeks on the market and sell for a final price above asking. It’s common for a home to receive multiple offers, and some homes may go under contract after only seven to ten days on the market. Clearly, demand is still in a good place. The price drop is discouraging, but it mirrors what is happening throughout the country. After consistently rising throughout 2020 and 2021, home prices began to drop in 2022. There are several reasons why this is happening, but inflation and interest rates are at the top of most lists of possibilities.
2. When could things start to change?
It’s hard to say. Nobody knows for sure when interest rates could begin to drop, although recent history has shown that rates will typically return to past averages at some point. It’s important to take into account how the time of year impacts the state of the housing market. Studies show that sellers tend to experience more success when listing homes for sale during the late spring or early summer. Buyers are more motivated to shop during these months for a few reasons. Perhaps they have recently received an income tax refund, or maybe they hope to have a few months to settle their family into a new home before their children return to school in the fall. Don’t be surprised if the market seems to pick up as the temperature also begins to warm.
3. Should I be concerned about the current state of the market?
Despite the current slowdown and high interest rates, the market still seems to be in a relatively good position. Most industry leaders don’t expect that the upcoming slowdown will come anywhere close to what the market experienced during the crash of 2008. One key number they point to as evidence of the market’s overall health is the mortgage delinquency rate. They believe this statistic correlates with the market’s overall stability (or volatility). A higher mortgage delinquency rate would suggest that the market could be in trouble. Right now, mortgage delinquency rates are as low as they have been at any point in the past 25 years. This is good news for anyone with a stake in the real estate market.
4. How do these factors affect my home’s long-term value?
The effect of the current state of the market on your home’s long-term value is minimal, if it exists at all. Over the past 100 years, home values have actually outpaced inflation by nearly 3%. This means that they aren’t only growing with inflation but are truly increasing in value. This is important to remember at a time like this because the nation has experienced multiple economic crises over the past 100 years. This includes the Great Depression of the late 1920s and early 1930s, along with the housing market crash of 2008. The market was able to overcome these significant challenges and come out stronger on the other end. This is certainly encouraging.
5. Is 2023 going to be a good year to buy or sell a home?
You’re beginning to see how 2023 will present a unique set of challenges for anybody who is interested in buying or selling a home. This doesn’t mean that everyone should avoid the market in 2023. There are still reasons why the coming year could be an excellent time to move forward with your sale or purchase. Sellers will have an opportunity to capitalize on prices that remain high after several years of increases. Although home prices won’t rise much in the coming months, they are still significantly higher than they were a few short years ago. Buyers may find that they have more negotiating power now that demand has cooled from where it was in recent years. They can also position themselves to begin building equity faster if they are willing to move forward with their home purchase.
Ultimately the decision to buy, sell, or stay in 2023 depends on your overall financial position in context. Do you have enough money set aside to fund a down payment? Are you prepared to move quickly in a competitive market if you find a property you like? Have you done anything to increase your home’s ROI or prepare your property to sell? These are each important questions to ask depending on how you plan to move forward in 2023.
6. Who can help me shop for a home?
Andrew Rogovic works hard to stay up to date on the current state of the Rye real estate market. Andrew also has over 20 years of real estate experience and has helped hundreds of clients during his time working in the industry. He is one of the most respected and sought-after real estate agents in the entire area. Reach out to Andrew if you’re thinking about buying or selling a home in the Rye Brook area.
