A Rollercoaster Quarter: Highs, Lows, and Interest Rates
As Q1 2023 comes to an end, I’m reflecting on the unpredictable real estate market we’ve experienced. It’s been a bit like the stock market, with really high highs and really low lows, driven primarily by fluctuating interest rates. We saw rates dip into the upper fives, then rise into the upper sixes, causing the market to experience ups and downs.
Year-over-Year Statistics: Sales and Inventory
Overall, closed sales year over year is down between 25 and 35%, depending on the city and market, with the East Metro experiencing a nearly 35% decrease in close transactions. The median sale price is down a couple of percent, although we’re coming off of one of the hottest years in real estate. The biggest factor that continues to play a role in the market is new inventory, with new listings down about 10%. Despite this, people are still buying and selling homes.
The Buyer’s Experience in Today’s Market
In Q1 2023, every property I’ve sold, except for one, has had multiple offers. However, we’re not seeing the bidding wars of the past. Buyers are now winning three or four out of the five battles in negotiations, whereas in the past, sellers held all the cards. As a buyer, you can go through the inspection and appraisal process like you normally would, without waiving inspections or offering appraisal gap guarantees.
Sellers’ Perspectives and the Importance of Timing
Sellers are still getting their asking price, with homes selling for roughly 100% of the list price. They’re also getting their preferred closing dates for the most part, but some give and take on both ends is normal in a balanced market. With all the predictions I’ve made this year proving wrong, it’s challenging to predict what will happen in Q2 2023. What I do know is that timing is crucial.
When I meet with my clients, I stress the importance of timing. It’s nearly impossible to time your life and the market perfectly, but being a little flexible can make a significant difference. Sellers who have timed their listings well have made two or 3% more than they would have otherwise.
Moving Forward into Q2 2023 and Beyond
As we progress into Q2, we’re likely to see peaks and valleys in the market. Buyers have shifted from fear to acceptance, understanding that interest rates will settle somewhere in the five-and-a-half to low six range for a while. They’re willing to move forward and purchase homes with this in mind.
If you’re considering buying or selling a home, don’t hesitate to reach out for guidance. As a luxury real estate agent, I’m here to help you navigate this unpredictable market and make the best decisions for your unique situation.
