Buyers who worry that their money doesn’t get them much these days will be bummed to hear that it’s probably not going to change.
The changes in the market forces are conspiring together to create less inventory, and a couple of big blows this year could really drive down the number of houses for sale in 2023.
Look at the trend so far:
Number of NSDCC detached-homes listed between January 1st and July 31st
Why don’t people want to sell? Or why do those who might sell, talk themselves out of it so quickly?
- Having to pack everything up.
- Difficulty of finding a suitable replacement home.
- Paying six-figures in capital-gains tax.
- Have to leave town to make it worth it
Added to the list this year:
- Getting a higher mortgage rate.
- “Bad time to sell”
We know that over 80% of the existing mortgages have a rate that’s lower than what you can get today. Even if you could sell your home for top dollar, the thought of paying a higher interest rate is enough to stop potential sellers in their tracks.
But the last one is the killer.
Once sellers get the feeling that the market has cooled off and they might not be able to sell their home for their fantasy price, then it is WAY TOO EASY for them to suspend all thoughts of selling, and decide to wait until “the market gets better”.
Jay Powell thinks that raising rates will cause home prices to come down, but he didn’t talk to any homeowners about it. It’s only going to continue the trend of fewer homes coming to market, and keep pricing high.
The 2023 Selling Season could be an all-time dud, just because there will be so few homes available.