Those predicting a bear market for housing may be a little too downbeat heading into 2023 given a number of factors supporting conditions for a decent market, if not a good one. It may not feel as euphoric as 2021, but the fact is millions of homebuyers across the country will come to the closing table this year…and live to tell about it. Here are 5 reasons we feel positive about the 2023 market:
Normally, a lack of homes for sale wouldn't be cause for celebration, but in the current environment, it's one factor that has stabilized the market. Low inventory, which is 33% below pre-pandemic levels, has kept prices at or near recent highs.
According to S&P/Case-Shiller, median home prices in the Chicago metro are up 28% over pre-pandemic levels, while nationally prices are up 39%. Even if home prices undergo a modest correction this year, most sellers should still enjoy a healthy return on investment.
SWIFT MARKET TIMES
Another sign of a healthy market: homes are selling fast. In December, the average market time across the Chicago metro was just 45 days. Meanwhile, in Chicagoland, homes that required no price changes sold in less than 20 days in each of the last three months of 2022.
NO RELIEF IN RENTING
Higher mortgage rates have driven many people back to the rental market, and what they've found, especially in major metros like Chicago, is rents at all-time highs. One has to ask oneself if it's better to start building equity and enjoying the tax benefits of homeownership now or keep paying a landlord's mortgage?
THE NEW NORMAL
The artificially low mortgage rates of the pandemic are history, but many a strong market has ridden on the back of rates in the 6% range. Slowly but surely, the market is adapting to this new reality. Better yet, the Fed's inflation fight appears to be working, and as inflation comes down rates should follow, giving today's buyers the opportunity to refinance.
For more buying and selling tips or a market analysis of your local area, feel free to reach out any time.