What is going on in Real Estate now, Nationally, Regionally & Locally?

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Wow, what a year its been. Nationally, we began 2022 with mortgage rates averaging 3.25- 3.5% for a 30 yr. Fixed. Now, as of today’s date, 12/19/22 we are exactly at double, 6.3%. In my opinion, that is attention grabbing but in light of the current economic landscape, ever-rising costs of all goods & services, supply chain shortages, overall, general inflationary conditions, it seems logical that the Federal Reserve would counter that trajectory with raising the interest rates.

How has this impacted the national real estate landscape?
We are now seeing prospective buyers being squeezed out of the market at their price point & desired location. Higher interest rates effect everyone.

Regionally, this has effected higher income demographs the most. Whereas in the past 10 yrs, since the mortgage crisis of 2007-2010, prices of real estate everywhere typically ascended. Financing was cheap, the all time low that I last recorded was in 2021- for those with perfect credit, a 30 yr. Fixed could be had at a historic 2.49%. This caused a frenzy in most markets & bidding wars & multiple offers became the norm. Days on market were fewer & fewer, as the easy money fueled an accelerated increase in home prices.

Now come to December 2022. Here we are in the aftermath of a post-Covid apocalypse. Many people are still recovering from job change/loss, illness & national economic impacts that have now caused most to re-envision priorities, tighten purse strings & change financial habits. A significant rise in the interest rate obviously gives pause to a large sector of the potential home-buying popualtion.
However, this is not always a shared perspective of home-seller’s.

Many home-seller’s are still riding high off of the frenzied crescendo of the ever increasing housing prices. Local Real Estate statistics, per the MLS’s in 2022, showed some markets final sale prices going over the list price from $50,000 to $150,000. However, despite what some choose to still see, even at the word of their real estate agent, or prospective agent, who wants the listing- the market is cooling.

The National Association of Realtors is reporting a 5.9% decrease in sales from September 2022- October 2022. Further, the country saw a 28.7% decrease yr to date in sales. Early distant warning.

A look at my local MLS shows more homes on the market than previous years in the last quarter of 2022.

NAR is also reporting that the impact is seen greater on the more expensive parts of the country & that most certainly includes Bergen County.

What does this mean? Hang on to your seats & wait it out. If the rise in rates doesn’t effect you personally, the increased inventory & cooling of the market (the absorption rate) could see prices come down, as buyer pool most certainly is & will continue to decrease. This will work to your advantage, as more buyers are edged out, the market will have a correction and temper down existing prices.

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