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If 2021 and 2022 were good years to sell properties what about 2023 and 2024?
Mortgage rates up greatly in 2023.
Many economists are predicting an economic recession in 2024.
a. Is the rest of this year a better time to sell or
b. Wait until 2024 and take a chance on an economic recession which could be shallow or deep or
c. Look to wait until 2025
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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It depends on the market where you are. Inventory is very low here, and demand is still high. There are many potential buyers with either cash or making enough to handle the 6-7% interest until they can eventually refinance. Homes were selling in 3 days with 20-30 offers over asking at over $1 million when rates were low, but then people stopped selling, and those few on the market took 2-3 weeks. The biggest problem was that the sellers downsizing or upsizing didn't want to pay high interest for their new place. Now things have settled down, and the few homes available are selling in a week or less again, and the prices have dropped but only 8.4%.
This is an area where many of the higher pay tech employees at Amazon, Microsoft, and Costco Corporate, and Boeing engineers are living. It's not the same in other places, San Francisco for example, where prices dropped 20%.
One of the ironies of 2021 and 2022 is the great refinance boom and all owners are enjoying very low rates right now. We refinanced our future sales. This happened in the 2010 - 2012 timeframe, but the difference was we had new homes rolling out new subdivisions from all the land foreclosures, we had both refinances and purchases. This time, there's no real booming new homes market. No dueling builders, it's my way or the highway new construction. They could build first time buyer properties (in the lower range) buy why would they even want to? The higher the price-point, the higher the profit. If FROSTS me to say this, but municipalities and on on the Federal level, there needs to be a tax incentive to build for the first time buyer. Why does it frost me? Because the builders don't deserve it. I guess we could look at the opposite, have a tax penalty for not building in the FTHB price range. But that goes against my core capitalistic money-grubbing beliefs. But something has to give. Our FTHB age has gone from late 20's to 36 in 2023, and that is in a very short period of time. At this pace, FTHB will be in their mid to late 40's. And that is very, very sad. We need legislators to take this on now, not kick the can down the road.
I just sold one of my homes but I'm waiting to BUY in 2024-2025 time frame. I'm in SoCal & I agree that recession will play a factor in 2024 plus the delay impacts of Fed raising interest rate. These downward pressure fights against the upward pressure of low inventory of housing supply produces a struggle equivalents to the bull vs the bears in residential real estate market.
Currently, I see not all real are the same. There's a chart showing the East Coast & the South continue to enjoy housing appreciation, while the West has cooled down and some metro areas are in a downward trend.
So if I'm considering selling, I'd sell THIS YEAR to take advantage there's still a strong demand.
I have found a seller but they are owner occupying and have spent over 18 months "fixing" up their new residence. With zero $ motivation I'm not sure what the delay is. It's not qualified tradesman which they have noted and more likely waiting on a better market for selling. Though we have locations and prices we don't need to wait until next year or the next.
Ans: Because the majority of homes purchased recently, were done with sub 3.5% money. Why would anyone desire to go from a 3.5% to a 7% money situation? Especially for the same house...
Ans: Because the majority of homes purchased recently, were done with sub 3.5% money. Why would anyone desire to go from a 3.5% to a 7% money situation? Especially for the same house...
Yup. People have no incentive to move! Unless it's something like a job relocation where you need to move.
Going forward, there's the talk where Fed will raise interest rate 2 more times this year, but how will this affect the ever increasing price due to the low supply is anyone's guess.
Someone I know is planning to sell one of their houses and they really don't need the funds from a sale. They are dragging their feet on preparing for a sale and half of the year is now gone. Some articles I read pointed to 2024 as being a year in which the economy may go into a recession.
2023 might be a better year to sell than 2024 and I think this seller is throwing in the towel on 2023.
Is that justified for someone who is financially independent and mortgage rates and all the rest of a difficult housing market don't factor in since 5% or 7% mortgage don't mean anything to this seller.
I suggested to a local seller that 2023 might be a better selling year than 2024. Since many are expecting an economic recession next year. Sadly they have not removed the furnishings from the house and it is clear they won't be doing anything this year. They should not be concerned about mortgage rates since that would be on me as far as cost.
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