2023 Real Estate Is a Whole New Ballgame
In March of 2022, the Federal Reserve began increasing interest rates to curb rising inflation. The result was a significant shift in the real estate market and fears of a crash similar to 2008.
What actually happened was more of a market shift and correction, along with a return to greater stability and a more balanced, sustainable market.
Now, while the national average for mortgage rates peaked at 7.375% in October of 2022, easing inflation brings a better outlook for 2023. Rates have started to come down though not as much as buyers and sellers were likely hoping for in the new year.
The fact of the matter is that the incredibly low interest and thus mortgage rates of the past two years will likely not be seen again for some time. The Fed only lowered interest rates in an effort to stimulate the economy during the most critical time period of the COVID-19 pandemic.
So, how do sellers and buyers move forward and adjust to the 2023 market? What strategies will help you achieve your real estate goals? Here are a few tips to keep in mind—starting with always working with an experienced and professional agent who knows the market inside and out.
Strategies for Home Sellers in 2023
Price Realistically for Today
As a seller, it’s all about keeping your expectations in check. Things are simply different now and your agent will price your house appropriately based on where the market is today.
Going with an overly aggressive price could scare away potential buyers and leave your home to linger on the market or subject you to price reductions. And if you go too low, you could leave money on the table. Remember that all you need is just one motivated buyer to get your home sold.
Stand Out from Other Listings
Before buyers even step foot in your home for an open house or showing, they’ll be scrutinizing every photo online. If possible, make repairs, boost curb appeal, clean thoroughly, and refresh the paint to something neutral.
Next, enlist a real estate agent who can provide staging that will allow buyers to imagine living in the home, photography that captures attention, and marketing materials that bring it all together. It’s the key to selling quickly and for top dollar.
Compete and Compromise
Like you, buyers are trying to wrap their heads around higher interest rates. Talk to your agent about offering a mortgage rate buydown or some other financial incentive that can help ease their financial concerns.
Be flexible about showing times and open houses. Don’t immediately refuse an offer below asking. And consider requests or credits for repairs. A little give and take can go a long way toward preventing a significant price reduction or not selling at all.
Expert Tips for Buying a Home in 2023
Take Time, Choose Wisely
Looking at the month-over-month market data in Denver and Boulder (and many other markets nationwide), homes are spending far more time on the market. And while inventory is still low, buyers do have more choices these days.
That means you have more time to shop around, tour more options, and ultimately choose the right home and location for your needs and budget. If you have a long list of must-haves, this is your opportunity to check those boxes!
Shop for the Right Financing
Whether you look around online or work with an agent who can put you in touch with reputable experts they know and trust, you can potentially find a mortgage rate below the national average.
There are also a variety of financial tools and options available to make buying more affordable such as a temporary or permanent rate buydown. And if you’re a first-time buyer, don’t forget to look into local programs that can possibly help out with your down payment.
Negotiate When Necessary
Except in certain micro-markets, the wild bidding wars, paying cash for appraisal gap coverage, and waiving the crucial home inspection have all eased. While mortgage rates are high, there are plenty of savings inherent to the real estate market. And you no longer have to settle.
If your agent advises that the price is too high, you can now negotiate a sensible (non-lowball) offer. If your inspection reveals issues, you have the leverage to ask for concessions or repairs. You could even request that the seller to cover closing costs. Use today’s market balance to your advantage.
Is 2023 a Good Time to Buy or Sell a Home?
If you find the right home that fits within your budget, buy it. Prices always fluctuate but ultimately trend upwards, making homeownership a solid investment.
And if you need to sell, keep in mind that you’ve built significant equity over the last couple of years. While prices have come down over the last few months, you can still come out way ahead.
Bottom line? With the right strategies, achieving your goals is easier than you might think.