That’s (almost) a wrap, 2022!
Happy holidays and happy almost New Year!
It’s been a crazy three years in the real estate market. We’ve seen intense price increases and bidding wars and then one of the largest market price swings across the country. As they say, what goes up must come down. Nationally, prices have come down far more than that of Boston, a big part of that is the continued demand we see locally, but also the lack of overall inventory making its way to the market for purchase.
For 2022, median prices for the Greater Boston area settled near where we started in January of this year. They saw their peak in June, but as interest rates scared off demand we saw the reverse by year’s end. The number of price changes continued at a steady pace almost inline with when the Federal Reserve announced increases to the federal funds rate.
Data representing single family, multifamily, and condos in Suffolk, Middlesex, and Norfolk counties from MLS
There was a 46% decline in the number of homes sold in December year over year, driven by lowered demand, but also by the low inventory on market. Typically, we see about 25% more inventory on the market vs. what we have currently.
So, what’s in house for 2023?
Per some Fed Reserve predictions, we believe interest rates will settle down in 2023. This means we do not expect rates to increase as quickly as they did in 2022, but they will continue to steadily increase until inflation is under control. After 2023, in order to fight a potential upcoming recession it is believed that rates will come down in 2024.
While rates are a part of your home buying journey, it is important to remember that you cannot really control them. What’s better is that you can change them in the future through a refinance (for example). Given this, we stress not to make decisions on rates alone, but to consider the bigger picture of your life’s plan with home ownership. When does buying a home make the most sense for you and your goals? That’s the question to be focused on.
2023 will not be like 2021 or 2022 as far as price increases go. In general, we’ve seen price spikes come to a halt. We expect home prices to see mild increases through 2023, as homes for sale continue to remain low and rates continue to slowly increase. We expect the Spring market to assist with the low inventory for sale and provide buyers more options come this May.
We’ve seen a reset on prices in the last 6 months and low buyer competition. That’s a pretty good combination for buyers. As a buyer, if you are actively looking to purchase, doing so in the next 6 months may give you good leverage, especially with sellers who are motivated.
We wanted to thank all of our clients from 2022. While you have options to choose from, we appreciate your trusting us with one of life’s most important decisions. We look forward to continuing to be part of that decision and assisting you with your future real estate needs! Here is to a great 2023!
Please reach out with any questions or comments! We would love to hear from you!
The Nuhom Team