Interest Rates, Lower Pricing, Low Listings? What’s going on in Real Estate: December 2022 Market Update
🔊December Market Stats are out! Interest Rates, Lower Pricing, Low Listings?
Let our Founder, Amy Youngren, explain what’s going on in Real Estate. Watch below:
No doubt things are feeling a little tumultuous as we enter 2023.🤔 But, it’s always best to look at the market from a good news, bad news angle.
There’s no denying interest rates hampered housing affordability, decreasing demand and pushing prices downward. As a result, many buyers and sellers took a seat on the sidelines. However, buyers should also remember housing prices have dropped ⬇️19% since the slump began. As a result, the price drops could balance out the interest rates, allowing you to still find opportunities. While home sales in December dropped by ⬇️48.2% from last year, you have to keep in mind 2021 was a record-breaking year. We’re also seeing decreases in listings in what has long been an inventory-challenged market. While it’s a hard pill to swallow for potential sellers who saw their neighbours’ homes sell for almost 10% more last year, the average prices in Toronto actually increased by ⬆️8.6% year over year. So despite reduced demand, if your home equity is optimized, low inventories mean you can still see a very fair price with fewer options available for buyers.
Increased interest rates present a challenge to both buyers and sellers.📈 Buyers might find it harder to qualify for a mortgage, while some sellers face lower prices as many buyers retreat from the market. However, we’re hopefully soon looking at flattening interest rates, making it easier for buyers with financial stability to take advantage of better prices. This could slowly increase demand.🏘️ One possible complication is that homeowners renewing their mortgages might find themselves with less than favorable mortgage terms.📃This could lead to more listings on the market, creating a perfect trifecta for buyers: fair inventory, decreased prices, and motivated sellers. Stay tuned to see how things unfold.