Zillow report says 2023 will be a buyer’s market. We agree kind of...

Soooo I think at this moment we’re all aware that mortgage rates have been goin’ up. They are coming in hot at nearly 8% currently. And this is freaking out potential buyers, who think this cannot be a good time to make the big move on buying a new home.

Here’s the thing, although the mortgage rates are rising, home prices are gradually declining at the same time. In Oakland the median single family home price fell to 970k from its height of 1.2m in July. But lets look at where is was a year ago we were at 1.1m before falling to 930k for the holiday slowdown. We have to be careful around the language we use because we are about to drop in median price not because the market is crashing but because of our tried-and-true holiday pumpkin spice coma.

Zillow polled 107 real estate experts and economists, nearly half of them believe that 2023 will continue to be a buyer’s market. A solid 50% of the experts polled believe 2024 will be even better for people planning on buying a new home. Ok- but the question is why. Locally the competition has reduced for the first time in several years and 2024 is predicted to be when rates come back down a bit.

So many states and cities saw unprecedented housing market growth during the pandemic, as a result the inventory is tighter than was pre-covid. Some cities will see big decreases in their housing markets now that the pandemic is declared over, some southern states for instance, are forecasted to have their housing market stay strong as rates continue to rise. Here is the Bay Area we have and will continue to have a supply issue. There will be areas that suffer and those are the predictable less commutable and lower price point homes.

It is unclear as to where rates will land however our partners at Goldman Sachs have stated that we are not likely to see any more “dramatic” rate hikes. In the last 8 weeks there has been a 38% rate increase, and its up 59% from what it was at this time last year.

But never fear ya’ll! What goes up, must come down. The good news for buyers in this moment is you can get a much lower price now than you could have last year. And the rates will not be high forever. When they go down, like they always do eventually, you can refinance, and get it down nice and low. It might have been worth it to pay a higher rate for a year or so, to purchase your house at a lower price. Marry the house and date the rate. Don’t be scared of buying in this market, and remember hindsight is always 20/20. Don’t be a buyer looking back on this time and wishing they had made a move when all those home prices dropped, call your Monday team agent today!