Next year is upon us!
If there is one word to sum up what to expect in 2023, it’s sluggish.
- Dull (not sharp) pricing.
- Patient buyers.
- Higher rates.
- Slow reactions.
Those sellers (and their agents) who are bold enough to list their home for sale early in the year will be relying on recent comparable sales to guide them on price. But where are the 2022 comps? They are all going to be higher than what the buyers are thinking. Sellers like to use the highest sales to determine their list price, so they will consider the frenzied-up sales from early 2022 as part of the dream too.
Their only hope is that no other new listings pop up nearby to spoil it for them.
Buyers will be determined to wait this out.
Mortgage rates will be climbing higher, and buyers will want to be compensated with lower prices – and it won’t matter much what the price is, they will just want it lower. But sellers aren’t going to believe it until they test out their aspirational price first.
As a result, we’re going to see more like this:
Listing agents won’t be rigorous about their initial list price, or about reducing their price after a few weeks of failure on the open market. They will just wait it out, and then 70 days later they will get lowballed….and just take it.
We know that the estate sales will be a predominant part of the inventory from now on, and they will be particularly prone to being hit like this. But because the kids will be tired of waiting for their windfall, they will succumb and blame Jay Powell.
But hopefully it will mean that the needed price discovery will be completed in 2023!