This time of year is filled with reflections on the past and predictions for the future and real estate is no different. While national news has painted a pretty dire picture for real estate in 2023, locally it will not be so doom and gloom - even with the hike in interest rates. Here are three reasons why:
Supply and Demand - the Metrowest market is still lacking inventory, like a lot of inventory. There simply are not enough homes for buyers and because of this the real estate market will still be competitive in 2023.
Rent is very high - There was a time when rent was significantly lower than a mortgage payment. That is not so anymore. The lack of inventory has driven up the cost of rent and because of this the rental market has suddenly become very competitive so more people are looking to own instead of rent.
Location - The Metrowest area is an attractive place to live. There is a wide variety of urban/suburban cities and towns to choose from. The distance to Boston and Worcester is a commuter’s dream and there is a lot of industry in between. All of these factors contribute to the attractiveness of Metrowest.
The graphic below highlights the lack of inventory and the significant jump in home sale price from 2021-2022. Even with rising interest rates, 2022 was still a very competitive year in real estate
Home sale prices will continue to rise, however, not at the rate they have been in the past few years. Instead of a 6-10% hike in price year over year, I predict home sale prices will rise between 2-5% year over year. While some homes will continue to sell for above ask, it will not be the norm. Homes will stay on the market longer and contingencies will come back. This will start to level the playing field between buyers and sellers, which is a good thing!
Something to keep in mind though - If you see a home that you fall in love with (and is priced accurately), chances are others will fall in love with it too. Don’t sit on it because you think you have all the time in the world and don’t bother low-balling the offe. Neither strategy will get you the house.
Final thoughts:
Keep your pre-approval up-to-date and make sure you have a good real estate agent by your side so when you do find the home of your dreams, you’ll be in the best position possible to make a strong offer!
Questions about the market? Call, text, or email me anytime. I’m always happy to chat!