As the spring of 2023 continues, the real estate market is experiencing a number of changes that are affecting both buyers and sellers. While the market has historically been strong, recent developments have caused some uncertainty and volatility in the market. Let's explore some of the key trends that are currently shaping the real estate market.
1. Inventory Shortages
One of the biggest challenges facing the real estate market in the spring of 2023 is a continued shortage of available properties. Many potential sellers are holding onto their homes due to concerns about the economy with layoffs and bank failures, leading to a significant decrease in the number of homes on the market. Also, many would-be sellers aren't willing to give up their low interest rate mortgages and put their homes on the market to get into higher rates with a replacement home. This has created a highly competitive market, with buyers frequently encountering multiple offer situations and bidding wars.... again!
2. Rising Prices
As demand for homes in California continues to outpace supply, home prices have risen significantly in recent months. This trend is expected to continue throughout the spring of 2023, with experts predicting that prices will increase by 5-10% over the next few months. This is good news for sellers, who stand to make a significant profit on their properties, but it can be challenging for buyers who are struggling to afford homes in this expensive market.
3. Changing Buyer Preferences
Another trend that is affecting the real estate market is a shift in buyer preferences. With more people working from home or having hybrid work schedules due to the pandemic, many buyers are looking for homes that offer ample space for home offices and outdoor living areas. Additionally, there is a growing interest in sustainable and eco-friendly homes, as well as homes that are located in walkable, urban areas. Buyers have become much more discerning in their choices and many homes that would have gone quickly during the pandemic boom are sitting on the market longer that don't have the popular features. It's a tale of two markets: A boom for desirable homes, and a bit of a challenge for some sellers... Pricing strategically, more than ever, is key for sellers in this market! Pricing is a marketing tool, and sellers need to remember that the list price can dramatically affect the foot traffic and offers that come in for a home.
4. Fluctuating Interest Rates
Interest rates have been fluctuating up and down in response to economic uncertainty and also the Federal Reserve's efforts to curb inflation. There has been some stabilization in the rates recently, and buyers are starting to get used to the elevated rates compared to the ultra low rates of the past couple years. This trend is expected to continue throughout the spring of 2023. This means that buyers may need to act quickly in order to secure low interest rates if they do go down as some experts expect in the summer months, just in case they rise again. Rates will continue to change up or down, but buyers should keep in mind that if they do go down again, the market heats up even more and stimulates competition and pushes prices up even further.
Every buying and selling situation in the current market will have its unique challenges, and our team is ready to help tackle every market condition in order to help our clients become homeowners or to help market and sell their home successfully. We are happy anytime to start a conversation! Reach out to firstname.lastname@example.org and let us know if you have any questions or comments.