Market Uncertainty Breeds Opportunity for Smart Buyers

Market Uncertainty Breeds Opportunity for Smart Buyers

I love markets like this because they create opportunities for risk takers like myself. The masses who listen to the fearful doom and gloom media reports miss buying opportunities in a shift. The unknown is a great time to plan, buy, and build almost anything making a shift the opportunity many home buyers need to purchase a home.

For any first-time home buyer who has yet to buy, 2023 will mark one of the best buying opportunities in 4 years. Making a move up from your starter home? You might just find that next move in 2023 with less competition and more opportunity to inspect and finance your move up. Traditional negotiations will return providing more protections for buyers which will provide a more balanced buying process. This may be short lived once the economy cools.

Interest rates are higher, but the benefit to that is reduced competition. Exhausted home buyers tired of losing house after house, waiving inspections, and finance contingencies to compete for houses now have opportunities to buy. The more balance market of 2023 will have fewer competing offers and adjusted prices as interest rates rise. The housing market still has a desperate shortage of housing inventory. There's an estimated shortage of 3.8 million housing units nationwide. The housing shortage is so dire that even in Connecticut, known for local rules that require large lots for single family homes, state lawmakers are considering changes. Uncertainty with higher rates, mitigates some of the competition. This is an opportunity! Take advantage now to avoid even higher prices in the future.

Be smart about your home buying thought process, research the markets you want to live in, and avoid listening to the media. Don Henley of the Eagles Band said it best in the song Dirty Laundry – “the boys in the newsroom got a running bet” their job is to sell stories of disaster and fear in the housing market. Honestly, the most fearful housing market in my 20-year career was the market of 2022 when buyers removed all their contingencies and bought homes without doing their due diligence. What we are seeing now is a more thoughtful and reasonable process to purchasing the most expensive item any of us will ever buy…but the cooling will not likely last.

2023 May Mark the Best Buying Opportunity in 4 Years

No one can be certain of the future, but the facts leave clues. If you are in the market to buy, turn off the noise and evaluate the current climate based on the factual data and your financial standing to make the best financial and housing decisions for your family. Unfortunately, housing decisions are primarily based on emotion. Try to take that out of the equation. Look at local rent rates, three years of sold data, and location specific municipal improvements for your target neighborhood before you make an offer and research the home’s history.

Facts on Housing November 2022:

• Interest Rates are approaching 7% and recently as of 11/10 adjusted down to 6.65%
• In 2019, the U.S. was short 3.8 million homes — both places to rent and places to own
• The shortage as we head into 2023 is approaching 5 million homes down
• Millennials are the largest generation group in the U.S. with an estimated population of 72.19 million. Born between 1981 and 1996

So how do you work the current environment to get the house and pay a fair price for the home?

Here are some helpful Tips for 2023 Home Buyers:

1. Select 3 housing opportunities and bid them against each other
2. This period of rising rates makes the markets uncertain and provides buying opportunity
3. Buy the house now and refinance later
4. Pay down the loan to get a better interest rate
5. Make your purchase contingent on your home sale – Offer more for your purchase for the benefit of a home sale contingency
6. Buy Income producing properties and live in one half while renting out the other
7. Buy your second home and rent it out to produce cash flow.

Need advice on the housing Market? Feel free to call us for a no obligation buyer or seller consultation. Powers Realty Group is Wisconsin’s #1 Team and Milwaukee’s Luxury Leader advising Wisconsin clients with best resource in real estate.