2022 market review and 2023 predictions
Source: Bright MLS
2022 Unusual Market Year
2022 saw two markets. The first half of the year was “frenzied” with homes selling quickly, historic low inventory and rising home prices.
The second half of the year was “frozen”. Prices and activity fell sharply due to rising mortgage rates, high inflation and affordability challenges
Mortgage rate surge at end of 2022 average 30 year fixed rate was 6.42% down from 7.08% but double what they had been in 2021. This raise eroded homebuyers purchasing power, making many people decide to wait it out.
Watch out for falling prices!
Prices were up 6.2% in the beginning of 2022 due to the tail end of sub 3 mortgages. By the fall prices were down 11.9% but still by the end of the year the average sales price was still 23% higher than in 2019.
Not Budging
Both the buyers and sellers markets pulled back significantly in 2022 due to mortgage rate increase. Most sellers are also buyers, and if they refinanced with a sub 3 rate, there is little incentive to move now. Also, many homeowners are worried they won’t be able to find a home to move into if they sell theirs.
Looking Ahead
Mortgage rates will continue to remain at around 6%
Home prices will continue to fall
Prices should remain stable or rise slowly. Markets that are printed for price declines include second or vacation homes or exurban “zoomtowns”.
2023 is not 2008!
Differences between now and 2008 include
What to do in 2023
Buyers
Buyers should shop around for a loan. Rates and terms can vary between lenders.
Be prepared to act when you find a home you want to make an offer on.
Sellers
Pricing is very important.
Appropriately priced homes will sell quickly
Buyer traffic will increase in the early months of 2023
Be prepared fore buyers to negotiate and ask for help with closing costs.
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