The past few years have contained many twists and turns for the local real estate market. With so much uncertainty about the future, how can you know whether this is the right time to shop for Buckhead real estate? Nobody can predict the future, but it’s possible to learn a lot from current trends and expert predictions. You can use this information to get a feel for where the market could be headed in the coming months and weeks.
How are things currently going?
The third quarter was tough for the national real estate market as a whole, and Buckhead was not immune to the effects of rising interest rates and rampant inflation. Activity in the housing market declined throughout the Atlanta area during the third quarter of 2022. Interest rates were quite low in 2020 and 2021 as the Federal Reserve searched for a response to economic problems presented by the onset of the COVID-19 pandemic. This prompted many buyers to enter the market for homes, which drove up average sales prices. These prices continued to rise throughout the first half of 2022 but have started to fall in recent months. Experts wonder if the market might enter a recession in 2023. It’s possible that prices don’t rise much at all in the following year, and they may even decrease slightly in some areas.
How bad will the recession be in 2023?
It depends on who you ask. The general consensus is that the downturn will be minimal. A major market crash is unlikely, and memories of 2008 aren’t expected to repeat themselves. One positive piece of evidence is a mortgage delinquency rate that is reaching a historically low level. Many real estate experts point to this number as a key piece of evidence of where the market could be headed in the coming months. Less optimistic individuals will point to rising inflation and interest rates as key points of concern going forward. While this is definitely something to watch, it’s worth mentioning that home prices often rise with inflation, given the fact that homes are hard assets. As for the interest rates, there is past evidence to suggest that stark increases are usually followed by fast drops.
Does the current season impact the state of the housing market?
You’ll see the market rise and fall during a typical year. The market is often most active during the summer months. Sellers tend to make better profits when listing homes during May and June. Many buyers have their tax refunds by this time, which puts them in a better financial position to make a down payment on a home. Families with school-aged children can move during this time without having to pull their children out of school. They can also spend the summer settling into their homes before their children return to school in the fall. Everyone also benefits from the pleasant weather when moving during the summer. Nobody likes loading boxes in extreme temperatures or driving a moving truck through the snow. While the market thrives in the summertime, it often slows down during September and October. This doesn't fully explain falling sales prices during the third quarter of 2022, but it gives some additional context as to why this could have happened.
Should I buy a home in 2023?
If you buy a home in 2023, you’ll benefit from sales prices that likely won’t increase far beyond where they currently are. However, you’ll pay higher interest rates, and you’ll have to be prepared to meet your monthly mortgage obligation despite high inflation rates and a rising cost of living. There are still benefits to purchasing a home in the next several months. By locking in an interest rate now, you’ll protect yourself from the possibility that they continue to rise. You’ll also begin to build up equity sooner than you otherwise would. If you think that a home purchase might be in your short-term future, consider reaching out to a lender to discuss what sort of loan you could qualify for. Your lender will run numbers based on your debt-to-income ratio and your current credit score to determine what loan amount you could pre-qualify for. This information will be important to have as you shop for homes since some realtors and sellers will want to see a pre-approval letter.
Should I sell a home in 2023?
If you’re thinking about selling in 2023, you may be disappointed by the prospect of falling home prices. The outlook isn’t entirely bad, however, as most people don’t expect home prices to fall too far from where they currently are. They will likely remain significantly higher than they were a few short years ago. At the same time, you must be ready to turn around and buy a home with a loan at a higher interest rate unless you’re in a position where you can spend cash on a home. To get a better idea of what sort of value your home could have, reach out to a local real estate agent and ask if they can run a CMA, or Comparative Market Analysis, on your home. This will give you a better understanding of what prices other homes in your area have sold for in recent months. You can use this information to think about where you might price your home. From there, you can look at other homes on the market in a similar price range to see what sort of features or amenities they have. This will help you determine whether or not there are any upgrades your home needs to have so that it won’t be at a disadvantage when it comes onto the market.
Who can help me buy or sell a home?
Kelly Boudreau knows Atlanta’s neighborhoods inside and out. She is a second-generation real estate agent who specializes in luxury Buckhead real estate. Her experience equips her for success no matter what the current market climate is like. Reach out to Kelly when you’re thinking about buying or selling a home in the area.