As we come to the end of 2022, I want to reflect on the real estate market in Woodbury specifically, and discuss some of the wins and losses we have seen throughout the year.
First, let’s talk about the winners. Undoubtedly, the sellers who sold in the first or early second quarter of 2022 were the biggest winners. These sellers were getting multiple offers, selling for 105 to 110% of their list price, and didn’t have to make any repairs or prepare their homes for the market. The market was in such high demand that it was almost a bidding war for every property, something I have never seen before in my career and do not expect to see again.
As we move into 2023, I believe we are entering a more balanced market. This is good news for buyers, as they can now shop for a home with more patience and have more negotiating power when it comes to price and closing costs. They can also have inspections and ask for repairs without the fear of losing the property. However, the downside for buyers is that they may have to pay more in interest. So, if you’re more focused on monthly payments, you may not be as fortunate, but if you’re more focused on sale price, you’re definitely in a better position.
As for the losses in 2022, buyers who waived inspections and paid over asking price were definitely at a disadvantage. This was often due to fear of missing out (FOMO) and the desire to capitalize on low interest rates. However, as we’ve seen, these buyers are now facing major issues with their homes such as water in the basement or frozen pipes, issues that could have been caught in an inspection had they not waived it. Additionally, the current interest rates of almost 7% are double what they were in previous years and have resulted in a loss of buying power.
Sellers who did not act in the first half of the year and were waiting for the peak of the market also missed out and lost around 10% in potential profit. As an example, I currently have a home on the market in Stone Mill Farms, an identical floorplan to one I sold three doors down in April 2022. The April 2022 property went on the market at $789,000, was put in a bidding war and sold for $865,000. The current property, which I believe is in better condition and has better amenities, has been on the market for 60 days at $799,000.
As we move into 2023, my predictions are that we will see a continued balancing or decline in home prices. As always, timing is key in the real estate market and it is important to be informed and make decisions based on the current market conditions.
