4 min read · March 3, 2023
As the inflation eases and it seems that a deep recession will be avoided, many people may consider buying a home. While rising mortgage rates have slowed down the real estate housing market, buyers that are willing to buy a property in 2023 will find there’s less competition and a better chance to negotiate with sellers.
In 2022, home sales in the US slumped nearly 18%, which was the biggest annual decline since 2008. Considering high mortgage rates and inflation, this shouldn’t come as a surprise. However, prices still remain high, although they expect to slightly drop in some states.
According to the National Association of Realtors (NAR), Atlanta-Sandy Springs-Marietta metro is the best place to buy a house in 2023. The report is based on factors like home affordability, job growth, migration gains, and housing supply. Since the job market is stable with companies like Apple and Microsoft opening offices in the Atlanta metro area, home prices don’t seem to decline.
Raleigh and Dallas-Fort Worth-Arlington are also among the best places to get a property in the US with low unemployment, plenty of tech companies, and home inventory increasing. In fact, all the top cities to buy a house are located in the South: Florida, South Carolina, Texas, Tennessee, Alabama, Georgia, North Carolina, and Arkansas.
While many buyers across the country are waiting for prices to drop, it won’t be a sharp decline as in the 2008 financial crisis. Some markets across the US will remain hot, although sales may be lower compared to previous years.
Pinnacle Realty Advisors, brokerage-as-a-service provider, prepared a whitepaper to help real estate agents overcome market challenges and boost their business. It covers the current market trends, discusses the situation in the housing industry, and shares useful advice on achieving success in these uncertain times.
Mortgage rate buydowns have become the latest housing market trend, allowing to lower interest rates for a fixed period of time. This means that a seller, mortgage lender, or a homebuilder can pay cash upfront to lower mortgage payments for buyers.
People struggling to sell their property can offer a buydown to make it more appealing. A popular 2-1 buydown means that your interest rate will be lower for the first two years. This way, buyers can expect to pay less and then refinance their mortgage.
While this is a good chance to get your dream home and lower interest rates, some buyers may start to struggle when they’ll have to adjust to higher mortgage rates once a buydown period is over. However, in the current market situation, it’s the only way for builders to attract more buyers and avoid a sharp decline in sales.
Since the market has slowed down, buyers have a good chance to negotiate with sellers and get some benefits. Over the last few years, many buyers skipped the appraisal or the inspection to gain an advantage in bidding wars and speed up the buying process. Since the housing market has cooled off, appraisal and inspection services will come back on the table to help buyers negotiate a better price.
Research by realtor.com revealed that in 2022, 32% of sellers paid some or all of the buyers’ closing costs, and 29% paid for home repairs after the appraisal, which was unheard of in the last couple of years. This only proves that now it’s a good time to look for a new home, even though mortgage rates may suggest otherwise.
Negotiations on the home price have also come back. During bidding wars in the last few years, sellers had the upper hand and you couldn’t expect them to lower the price, as there were dozens of other buyers waiting along the line. Of course, many markets across the US still remain hot, so this won’t definitely work everywhere. However, it’s important to do your homework, research prices, and consult a real estate agent to smoothen the whole buying and negotiation process. Since the situation in the housing industry is complicated, buyers will demand for agents that are familiar with the local market and can provide guidance on pricing and marketing strategies to maximize the sale of their property.
Want more real estate predictions for this year? Pinnacle Realty Advisors created a whitepaper to assist real estate agents in overcoming market obstacles and enhancing their business. The document includes insights on present market trends, the housing industry, and valuable tips for thriving in the current uncertain climate. Click here to download it now.