Real estate moved at a record-breaking rate in 2021 and a portion of 2022. Homes were selling fast, for over the asking price, without contingencies, and many Buyers purchased with cash. But in 2023, the market is likely to continue the slowdown that began in the later part of this year. Even in a consistent market, it is often difficult to decide whether you are ready to make a move. If you seek to build wealth through homeownership or access your equity by downsizing, the slower 2023 real estate market is an opportunity you don’t want to miss.

To help you make the best decision about whether you are ready to buy or sell in 2023, here is a list of key things to consider. We'll go through what to anticipate if you're getting ready to buy or sell in the next few months.

Points to Consider When Getting Ready to Buy or Sell in 2023

A recent Fannie Mae survey showed that 60% of survey participants anticipate higher mortgage rates, and there are growing worries about job security and rising home costs. The question becomes, what are your alternatives?

1. Buy now vs. continue renting?

Uncertainty is understandable, although those who wait to buy may miss out on intriguing incentives. Some people are waiting for prices to drop further, but here’s the conundrum - housing costs rarely experience significant drops. There are no indications of this market slowdown being like the Great Recession. This is not a foreclosure crisis. Housing inventory is lower than pre-pandemic levels and demand for homes is still relatively strong. Price escalations and bidding wars are over, but prices are not crashing. The reality of today’s market is that first-time homebuyers have a better chance than they had a year ago to find a home for under $500,000. The ability to buy now and lock in a mortgage rate is a critical driver for the current market. We know for certain that rent will certainly continue to rise, especially here in Oregon where landlords can raise rents up to 14.6%. If you purchase now, you can begin accumulating equity immediately or you could wait and risk higher housing costs next year. If you’re worried about rising interest rates, it’s best to get into the home of your dreams now, before prices increase, and refinance when the rates come down. If you’re expecting to get a 2-3% interest rate in the future, it’s safe to say it won’t happen. The low interest rates of 2020 and 2021 were related to pandemic economy drivers and really were a once in a lifetime opportunity. 

2. Is it time to ‘move up’ or downsize?

Deciding whether it’s the right time to sell your home can be perplexing. Many potential home Sellers are on the fence about listing now, especially after last year's rapid increase in home values. Rest assured, it's still a good time to sell, even though the market has recently slowed down. The overall housing supply remains low, which indicates that there aren't enough houses available to fill Buyers’ needs. If you are hoping to ‘move up’ to your forever home but missed out on the selling frenzy, don’t worry; there are still eager Buyers out there. The large millennial generation has approached its prime years for home ownership. For those of you who have lived in your home for a long time and are ready to downsize, those families seeking their forever homes are eagerly awaiting your move. With continuing supply constraints, 2023 will be an excellent time to sell your home. It is still a Sellers’ market!

3. Advice for Buyers.

You will be facing less competition when you find the right home. You no longer need to waive the inspection or appraisal contingencies. You have more negotiating power, so there's no need to offer above the list price. According to Altos Research, more than 40% of home Sellers have reduced their original asking price, so now, and going forward into 2023, will be a great time to buy real estate.

4. Recommendations For Sellers.

You’ve recognized a significant gain in equity over the last 10 years with rising home prices. Put that equity to work by taking advantage of the opportunity to make a move while prices are cooler. You can get more home for your money now and serious Buyers are waiting for your home to hit the market too. With interest rates on the rise, it may be better to take action sooner rather than later.

If you’re wondering if this is the right time for you to buy and/or sell a home let us help you evaluate your options. Get in touch with us today for a FREE consultation and to start your 2023 real estate plan!