The Market Report: December 2022

We have seen interest rates balloon over the last quarter, scaring some buyers out of the market and others to re-evaluate their price point. Other buyers remain focused on their price range, hoping for and in many cases now influencing negotiability. Where just a year ago many properties entertained multiple interested buyers and, in many cases, inflated pricing, they are now seeing less interest and slower movement. Buyers were motivated by the consumer demand from low inventory and the appeal of low rates, offering propped up purchasing power. Buyers were willing to face competition and pay a premium for product.

No single factor created our current real estate environment. But the Fed’s rate increases to combat inflation have certainly made significant impacts, particularly in the lower price point market segments. But while rates went up dramatically, we also experienced the steepest decline in 40 years for rates on the average 30-year fixed mortgage in November. Rates have come down. They will continue to fluctuate and will go down further.

For buyers right now, perspective on our environment is crucial to understand opportunities and the benefits of our current conditions. We see several factors that will play well for the active buyer this month and going into the new year. 

Last month we addressed the need for understanding mortgage product options, as lenders react to current conditions and meet buyer need for lower monthly outlay and lower down payment options. This month and in the few months ahead, we expect serious buyers to remain engaged and to have foresight to take advantage of a market that is offering choices, less competition, absent fellow buyers who are less focused with holiday obligations as well as sellers who are tuning in to the need for proper pricing.