One Month Gone. 2023 outlook after January
I know a lot of Buyer’s were hoping to hear that with increased mortgage rates resulted in a decrease in competition and demand. Using the small sample size of January here’s what we’re seeing in the Eastern Massachusetts real estate market.
The two words of the month have been Demand and Quality. Let me explain.
Demand is still high. Demand has shifted toward the more affordable homes, think sub mid 600s. The reality being that as rates rise, price ceiling for most buyers decrease. This intern is creating a higher demand at the more “affordable” listings. January is notoriously one of the slower months in the real estate market, February is also a notoriously slow month. Which does make both of those months a decent opportunity for aggressive buyers. That being said we can certainly see bottled up demand.
Why is demand so high? Well the truth is inventory is still really, really low. The demand is high in relation to the historically low inventory. Now I’ve heard some sellers are waiting for rates to go back down, my concern with that is the Fed has been pretty consistent on increasing rates. I’m not 100% sure why a seller would get the inclination that rates are going to decrease. The reality being with the limited inventory right now we are still in a seller’s market. If you’re a prospective seller, fry while the oils hot.
Okay, so why is the second key word quality? What we’ve been experiencing is the large majority of first time home buyers do not want a project. First time home buyers would rather spend more for a home that’s move in ready. There is a lot of competition for moderately priced homes, in great condition. The homes and condos that are selling very, very quickly are your starter homes that may be a little smaller for an established family, but are perfect for newly weds or families that are just starting out. That being said that does create great opportunities for those who are willing to put in some sweat equity and create the exact home they want. There are many loan options that are geared toward factoring renovation costs in to a loan, and we do have many general contractors that we have worked with in the past.
The large majority of us at Village have done their own renovation project whether that’s for owner occupancy purposes or as an investment purchase. We have the expertise and knowledge, if buying a project might be something your interested, we’d love to talk to you about how the process goes. We can certainly tell you what to avoid so you don’t pay the dumb tax like we may have!