Experts Forecast a Turnaround in the Housing Market in 2023

The housing market has gone through a lot of change recently, and much of that was a result of how quickly mortgage rates rose last year.Now, as we move through 2023, there are signs things are finally going to turn around. Home price appreciation is slowing from the recent frenzy, mortgage rates are coming down, inflation is easing, and overall market activity is starting to pick up. All of that’s great news for the housing market this year. Here’s what experts are saying.Cristian deRitis, Deputy Chief Economist, Moody’s Analytics:“The current state of the housing market is that it is certainly in transition.”Susan Wachter, Professor of Real Estate and Finance, University of Pennsylvania’s Wharton School:“Housing is going to ease up. I think 2023 will be a turnaround year.”Lawrence Yun, Chief Economist, National Association of Realtors (NAR):“Mortgage rates have fallen in the recent past weeks, so I’m very hopeful that the worst in home sales is probably coming to an end.”Robert Dietz, Chief Economist and Senior Vice President, National Association of Home Builders (NAHB):“. . . it appears a turning point for housing lies ahead. In the coming quarters, single-family home building will rise off of cycle lows as mortgage rates are expected to trend lower and boost housing affordability.”Bottom LineIf you’re thinking about making a move this year, a turnaround in the housing market could be exactly what you’ve been waiting for. Let’s connect to talk about the latest trends in our area.

Should You Rent Your House or Sell It?

If you’re a homeowner ready to make a move, you may be thinking about using your current house as a short-term rental property instead of selling it. A short-term rental (STR) is typically offered as an alternative to a hotel, and they’re an investment that’s gained popularity in recent years. According to a Harris Poll survey, 28% of homeowners have considered using a rental service to temporarily rent out their home for additional income.Owning a short-term rental can be a tempting idea, but you may find the reality of being responsible for one difficult to take on. Here are some of the challenges you could face if you rent out your house instead of selling it.A Short-Term Rental Comes with ResponsibilitiesSuccessfully owning and renting a house takes work. Think through your ability to make that commitment, especially if you plan to use a platform that advertises your rental listing. Most of them have specific requirements hosts have to meet, and it takes a lot of work. A recent article from Bankrate explains:“Managing a rental property can be time-consuming and challenging. Are you handy and able to make some repairs yourself? If not, do you have a network of affordable contractors you can reach out to in a pinch? Consider whether you want to take on the added responsibility of being a landlord, which means screening tenants and fielding issues, among other responsibilities, or paying for a third party to take care of things instead.”Not only is there the upfront time and cost of owning a short-term rental, but there are also risks that could come up for you down the road. Investopedia warns:“Risks of hosting include renting your place to rude guests, theft or damaged property, complaints from neighbors, and potential regulatory violations depending on your location.”There’s a lot to consider before taking the leap and converting your house into a short-term rental. If you aren’t ready for the work it takes, it could be wiser to sell instead.Your House May Not Be Ideal for Your Rental GoalsNot every house ends up being a profitable short-term rental either. One of the biggest factors is where your home is located. The less likely your neighborhood is to be a travel destination, the fewer requests you should expect from potential renters—and that impacts your bottom line. An article from the National Association of Realtors (NAR) advises:“When it comes to the viability of profitable STRs . . . consider factors like location, amenities, and whether the property is appealing. Most people seek STRs in locations where they vacation, so proximity to attractions is important. Likewise, the property should cater to a variety of travelers.”It’s smart to do your homework and learn how much rentals in your area go for, how much business they get throughout the year, and how this compares to your goals.Bottom LineConverting your home into a short-term rental isn’t a decision you should make without doing your research. To decide if selling your house is a better alternative, let’s connect today.

Lower Mortgage Rates Are Bringing Buyers Back to the Market

As mortgage rates rose last year, activity in the housing market slowed down. And as a result, homes started seeing fewer offers and stayed on the market longer. That meant some homeowners decided to press pause on selling.Now, however, rates are beginning to come down—and buyers are starting to reenter the market. In fact, the latest data from the Mortgage Bankers Association (MBA) shows mortgage applications increased last week by 7% compared to the week before.So, if you’ve been planning to sell your house but you’re unsure if there will be anyone to buy it, this shift in the market could be your chance. Here’s what experts are saying about buyers returning to the market as we approach spring.Mike Fratantoni, SVP and Chief Economist, MBA:“Mortgage rates are now at their lowest level since September 2022, and about a percentage point below the peak mortgage rate last fall. As we enter the beginning of the spring buying season, lower mortgage rates and more homes on the market will help affordability for first-time homebuyers.”Lawrence Yun, Chief Economist, National Association of Realtors (NAR):“The upcoming months should see a return of buyers, as mortgage rates appear to have already peaked and have been coming down since mid-November.”Thomas LaSalvia, Senior Economist, Moody’s Analytics:"We expect the labor market to remain robust, wages to continue to rise—maybe not at the pace that they did during the pandemic, but that will open up some opportunity for folks to enter homeownership as interest rates stabilize a bit."Sam Khater, Chief Economist, Freddie Mac:“Homebuyers are waiting for rates to decrease more significantly, and when they do, a strong job market and a large demographic tailwind of Millennial renters will provide support to the purchase market.”Bottom LineIf you’ve been thinking about making a move, now’s the time to get your house ready to sell. Let’s connect so you can learn about buyer demand in our area the best time to put your house on the market.

Where Will You Go If You Sell? You Have Options.

There are plenty of good reasons you might be ready to move. No matter your motivations, before you list your current house, you need to consider where you’ll go next.In today’s market, it makes sense to explore all your options. That includes both homes that have been lived in before as well as newly built ones. To help you decide which is right for you, let’s compare the benefits of each. Regardless of which option you choose to explore, working with a trusted real estate professional throughout the process is essential.The Benefits of Newly Built HomesFirst, let’s look at the benefits of purchasing a newly constructed home. With a brand-new house, you’ll be able to:1. Build your dream homeIf you build a home from the ground up, you’ll have the option to select the custom features you want, including appliances, finishes, landscaping, layout, and more. Bankrate puts it like this:“Building means customizing. . . . instead of wishing your home had a certain kind of flooring, a sunroom or some other special amenity, you’ll be able to tailor the property to your exact needs. You also won’t be limited to a specific location or neighborhood.”2. Take advantage of builder concessionsIn today’s market, a lot of home builders are working hard to sell their current inventory before they add more to their mix. That means many of them are offering concessions and are more willing to negotiate with buyers. That could work to your advantage in the process.3. Minimize home repairsMany builders offer a warranty, so you’ll have peace of mind on unlikely repairs. Plus, you won’t have as many little improvement projects to tackle. As realtor.com says:“. . . if something goes wrong with your new home, not only are there likely some manufacturer warranties in place, but many builders also include additional home warranties . . .”4. Take advantage of energy efficiencyWhen building a home, you can choose brand-new, energy-efficient options to help lower your utility costs, protect the environment, and reduce your carbon footprint.The Benefits of Existing HomesNow, let’s compare those to the perks that come with buying an existing home. With a pre-existing home, you can:1. Explore a wider variety of home styles and floorplansWith decades of homes to choose from, you’ll have a broader range of floorplans and designs available.2. Appreciate that lived-in charmThe character of older homes is hard to reproduce. If you value timeless craftsmanship or design elements, you may prefer an existing home.3. Join an established neighborhoodExisting homes give you the option to get to know the neighborhood, community, or traffic patterns before you commit. Plus, they have more developed landscaping and trees, which can give you additional privacy and curb appeal.4. Move in fasterIf you have a short timeframe to move or you just don’t want the process to take several months while your home is under construction, buying an existing home might make sense for you. U.S. News explains:“When you’re choosing a home, existing or new, you should also consider how long it might take to move into that home. Just because you have a contract doesn’t mean that your new home will be completed (or even started) at the time you agree to the purchase. It can be a struggle waiting for the walls to go up as you wonder what your home will become.”When thinking about where you’ll go after you sell your house, remember your options. As you start your search, think about what’s most important to you. By working with a trusted real estate agent, you can be confident you’re making the most educated, informed decision.Bottom LineIf you have questions about the options in our area, let’s discuss what's available and what's right for you, so you’re ready to make your next move with confidence.