Realistic expectations of the current real estate market for 2023

Spring has arrived and so has the real estate market! If you're wondering if it's a good time to buy or sell, the answer is yes. However, be aware of changes in the current market. This will help you move forward.

What can a seller expect?

Selling prices are fixed but remain flexible. Local sellers in Hopkins County (and surrounding counties) have not experienced the significant price drops as other states or regions. Many homes go on to sell close to asking price especially if the seller's real estate agent has done thorough price research through comparative market analysis and reviewed it with the seller before putting it on the market. But be prepared to remain flexible and willing to negotiate pricing and repairs.

Taylor Freitas at Bankrate writes, about the Texas real estate market, "Demand remains high, and prices are still rising year after year, despite the decline in recent months. However, since interest rates are still high, many buyers will not be able to spend that much on a home - be aware of how much your home is worth, and be aware when choosing a listing price."

Keep realistic timing expectations. Unlike the multiple bid frenzy of 2021 and 2022, things have stabilized and multiple bids are uncommon. So your property may stand on the market a little longer than in previous years. MetroTex, a Dallas-based professional platform for agents working with buyers and sellers, recently stated that homes in February 2023 stayed on the market about 18 days longer than last year.

make the extra effort. A show-ready home gives you an edge in a more competitive market. Removing the clutter, adding more pictures on the wall and keeping the yard tidy makes a big difference. Simple items you can do include revamping your flower beds, finishing small projects you've been putting off, and not skipping spring cleaning. You can also call a real estate agent and ask what needs to be done before putting it on the market.

What can the buyer expect?

A much larger pool of homes is available today than in 2022. Regardless of the current rate hikes, there are still good reasons why it's a good time to buy. Currently, inventory is at an all-time high. Last year and in 2021, a shortage of homes on the market created a domino effect of homeowners unwilling to sell because they couldn't find anywhere to go, creating an excess of buyers and not enough homes. Hence part of the reason (though not all) why we've seen multiple offers become common place during that time. Compare that to this year, with more homes available, you have more to choose from, which in turn means homeowners are willing to sell.

Interest rates are still lower than in recent decades. Yes, the interest rate is higher than what we saw last year. But ask your parents or grandparents what their interest rate was when they bought their first home. They would break down the bank door to get the rate you can get today. For example, my realtor, Janet Martin, remembers getting an 18% interest rate on her first home. Yes, you read that right, 18%. But good news - you can buy a house with an interest rate around 7% or 8% and then refinance if the interest rate drops. This is how you can build your equity in your home versus paying rent.

The power of negotiation has increased again. With an influx and excess of properties hitting the market in 2023, the bidding wars have lost steam. In the first part of last year, cash was king and buyers who bid higher than the asking price (sometimes, much higher) came out on top. It was created because of a housing shortage. But now, according to MetroTex, active listings are up nearly 200%. That means twice as many houses to choose from than last year. This allows buyers to have more negotiating power from the simple fact that they can find another home. Not to mention, some sellers still need to relocate due to job changes, retirement, etc. In addition, most sellers understand their need to be flexible with the asking price, willing to complete some repairs, and for their home to be more presentable/show ready. And all these conditions improve the house and also help you, as a buyer.

At the end of the day, what does this mean for buyers and sellers? Well, the local Texas real estate market is leveling out, although it may still be a bit more favorable for sellers. However, the market is much more equal. This creates a more level playing field that can benefit both sellers and buyers.

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