Happy New Year! It’s 2023! So how’s the market looking? AHHHHH it’s happening… again! What do I mean? What am I talking about? Brace yourselves for potentially another crazy real estate market cycle.
A recap of 2022, rates started off in the mid 3’s. However, during the course of the year, rates skyrocketed to as high as 7.3% which had a major reduction in buyer demand. However during early December, rates actually trended down into the low 6’s even highs 5’s, but then they went back up in the last few weeks of December by +.25 points.
At the start of 2023, rates are now trending back down. In fact, locally in Milwaukee, some lenders are offering 5.8% for a fixed 30-year loan. Ok, that’s good rates are coming back down, so what? Well, that’s caused buyer demand to increase. Nationwide mortgage applications have gone up +28% over the last week.
Throughout all of this in 2022 and even 2021, the inventory of homes available has been very low. Locally in Milwaukee, we’re averaging 2 months of supply. When buyer demand was drastically reduced last summer through the winter of 2022, that also made sellers hesitate or pause putting their homes on the market. Now as rates are trending down, buyer demand is increasing again, and inventory levels are still low. That is creating a perfect storm for another crazy sellers’ market. And I’m already seeing it happening right now in my Milwaukee market.
Last week I showed 4 homes that were all new listings. They were in good locations. All were in move-in-ready condition, however, 2 probably could use some remodeling. The other 2 homes were recently remodeled. All 4 homes had multiple offers and accepted an offer the next day! And we’re not even in the traditional peak spring buyer’s season yet! So it appears that the buying season is starting early this year. If you plan to purchase a home this year, because you have a need to get home, then plan and prepare accordingly. You MUST bring a pre-approval, and a fully underwritten pre-approval is best. This way when you find the home that you want to purchase, you can submit an offer on it right away. If you have to wait even 1 day for a pre-approval, that may be 1 day too late. Pre-approvals can take up to a week to get approved.
On the other hand, if your intention is to sell a home for as much as you can get in the market conditions. Then I would say, start decluttering, making repairs, and finishing up incomplete remodeling projects to put your home on the market soon. It’s looking like it will be another promising market for sellers and not so much for buyers. If you’re afraid of selling and then buying, there are a number of solutions out there. Reach out to me and I can help explain these to you.