BRRRR! It’s got really cold outside all of a sudden, and I’m not just talking about the weather. Last week, interest rates hit 7% for mortgages! And the impact has definitely been felt by the real estate world.
I’ve had a couple of buyers come up to me and tell me, “Hey, you know what, I think we’re going to wait on this home-buying thing.” On the listing side of things, I’ve seen a massive drop in showing requests alone. Homes that would have been gone in one weekend are now strangely sitting longer and even having price reductions. Sellers are actually accepting contingencies now and giving buyers money back in closing credits or concessions.
What are people predicting about the future of real estate? Some are saying that rates go up to maybe 9% to 10% still before the end of the year. Others are saying, maybe late 2023 rates will go back down to the 4’s. What about home values? Home values are expected to continue to appreciate but at a much slower pace. Due to still extremely low inventory, home values are not projected to decrease by much. However, in some of the boom and bust markets, those markets will definitely see corrections as buyers scatter.
However, you know what? Nobody really knows what exactly will happen. But one thing is for certain, real estate will always continue to happen. This is because real estate is a human essential need. People will continue to buy. People will continue to sell. Because you know what? Life happens, death, birth, job loss, job relocation, upsize/downsize your home, or moving closer to family and friends. So we’ll just have to wait and see how the real estate world shakes out.