May, June and July are peak buying and selling months for real estate, but what can we expect from the 2023 housing market sales?
For the past three years, we’ve been in a strong seller’s market. Low inventory and motivated buyers meant that sellers were getting more money than they had listed for, and in record time. We are starting to see that ease off a bit, but it’s not a complete recovery yet.
If you’re preparing to buy or sell this year, here’s what you should know:
Are We in a Buyer’s Market or a Seller’s Market?
The housing market is cooling down after a white hot couple of years. Inventory is still very low, but sellers are recognizing that buyers can’t afford sky high prices. After a couple years of high inflation and increasing interest rates, buyers have been less motivated to buy, especially at a higher price.
That being said, for those who are ready and motivated to buy a home, there will still likely be some competition.
So whether you plan to buy, sell or both, just be prepared to deal with those challenges.
What are the Current Challenges?
The top challenge facing buyers and sellers right now is low housing inventory. The U.S. has less than 1 million units for sale currently, which is a 40.5% drop from the end of 2019. This trend can be seen nationwide, affecting the vast majority of markets around the country.
Another challenge is affordability. Salaries have not increased at the same rate of our high inflation levels, which means that buyers have less money to spend on housing. Less affordable housing means potential sellers are staying put, leading to lower housing inventory and fewer buyers in the market. Plus, interest rates remain very high, which is prompting many potential buyers to wait on buying a new home.
Should You Wait to List or Buy?
The general consensus among industry experts is that housing inventory could get back to pre-pandemic levels by the end of 2024. So if you’re truly not in a rush to get out of your home, you might have more options in the next couple of years.
If you’re only looking to sell your home, this year could still be favorable for you – especially if you live in a good school district or more desirable area.
All that being said, timing the housing market is a bit like timing the financial markets. It can be a losing game. If you feel ready and motivated to buy or sell, and you’re aware of the current real estate climate, then this could be the right year for you to find what you’re looking for.
Quick Affordable Upgrades to Help Your House Sell Faster
If you do have to sell in this market, you can give your house an edge with some quick, relatively affordable upgrades.
Here are some research-backed ideas to help your home sell faster:
- Give your front door a fresh coat of paint. According to a Zillow survey, buyers were willing to pay over $6,000 more for a house with a black front door. Second and third place colors included slate blue and olive green.
- According to the 2022 HomeLight Top Agent Insights Survey, simple curb appeal upgrades can have major ROI. Fresh mulch, basic lawn care and weed control had a ROI of more than 500%, so it’s well worth the cost. Power washing your home and driveway, adding new house numbers and sprucing up the mailbox can also net you more for your home sale.
- Make your home look bigger by removing clutter. This can be totally free, or you can invest in a storage facility to hold your decorative, personal and seasonal items that don’t need to be in your home for showings. Pay special attention to closets and cupboards; the more you can remove from those areas, the more spacious they’ll look.
- Climate control your home. Whether it’s the height of summer or the dead of winter, make sure your home feels comfortable. It’s an immediate giveaway that your AC or furnace works well.
- Smell matters! Potential buyers will immediately notice the smell in your home. They’ll be checking for mold, smoke, animal odors, etc. Make sure your home is clean and invest in scent diffusers to keep your home smelling fresh.
Here are some additional resources to help you sell your home this year:
Home Renovations: Which Projects Are Worth the Investment?
How Much House Can You Afford?
Should You Rent Out Your House?
About Your Richest Life
At Your Richest Life, physician-focused financial planner Katie Brewer, CFP®, wants to help you build a successful financial future. For more information on the services offered, contact Katie today.
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