The past few years have been rocky for real estate. In 2020, 2021 and 2022, we experienced a major seller’s market; homes were flying off the market for record high prices. For buyers, this meant competing with several other bids, settling for a less than ideal home, and paying far more than usual.
When we look at the 2023 market, we do see a bit of a correction—but does that mean it’s time to list or buy? Let’s look at the current housing market:
2023 Housing: Where Do Prices Stand?
Thanks to inflation, high interest rates and low supply, housing prices are bound to be higher than they normally would be. But there is actually a bit of a recovery under way.
For the first time in nearly 11 years, home sale prices fell year-over-year in February. Additionally, home sales had their largest monthly percentage increase since July 2020.
That being said, houses are still pricier than they were in 2021, so affordability is an issue for many buyers. Sellers are starting to make more concessions to buyers, but it’s still a difficult market for many.
What About Housing Inventory?
Affording a home in today’s market is one thing; finding one is another issue entirely.
Currently, housing inventory in the U.S. is at about half of what is considered a healthy housing supply. That number looks different from market to market, but overall, there just isn’t as much to choose from.
This has been an ongoing issue for a few years, and it’s not likely to resolve overnight. Some experts think it will take until the end of 2024 or 2025 to see a return to housing inventory normalcy.
2023 Housing in New Hampshire
For those of us in New Hampshire, low housing inventory is nothing new. The lack of affordable housing has been an ongoing problem for several years. It makes it difficult to attract young families, new businesses and workers to the state.
This issue has only compounded in recent years, following the nationwide effects of high prices and more people staying put in their current homes.
For those of you in New Hampshire, you should be particularly careful about when you decide to move – especially if you plan to sell and buy in the Granite State. Know what areas you’re interested in, and be ready to make an offer quickly if you find a home you love.
If you plan to rent instead, know that it might take some time to find an available rental. Last spring, the vacancy rate for two bedroom apartments in New Hampshire was at 0.3 percent, a severe shortage compared to the national average of 5.6 percent.
Should You Wait to Buy or Sell?
If you have to buy or sell a home now, then now is as good a time as any (as long as you are financially prepared and understand the current real estate challenges.) But if you’re just hoping to upgrade your home, try out a new city or score a bigger yard, it might be worth it to wait another year or two.
We are also facing economic uncertainty. The Fed has continued to increase interest rates in order to slow down inflation, and we are starting to see U.S. employment fall a bit in response. It’s possible that more layoffs, or even a recession, could happen in 2023. If your current home is affordable for you, it might be smart to stay put until we see how the year plays out.
Do you need help planning for your financial future? Contact me today to set up a meeting to talk about your goals.