Okay, so I am no economist, but due to being a living, breathing human being in this world.. (and a realtor 😉 I read A LOT about inflation and the predictions involving interest rates going into the new year.

I want to know not only what to expect for our livelihood, but how to best serve you going into this new year..

Here’s an article I read this morning that inspired this email:

Economy Expected to End 2022 on Positive Note Ahead of Modest Recession in New Year

Following a significant decline in 2022 with a slight end-of-year uptick, housing and mortgage markets are not expected to meaningfully recover until 2024.

Simply reading the headlines of this article will give you an idea.. 
A few questions started buzzing in my head.. 

1. Does this mean people are going to wait over a year to buy a house for rates to drop 1%? Is that worth it? Can people simply recast their mortgage or refinance? 

2. This is huge for people who see the advantages of buying homes sitting on the market for 60+ days.. lower sales prices, sellers offering $$ toward closing, more negotiating power.. are buyers seeing this or are they blinded by rates? 

3. Buyers who have their downpayment saved and sitting in a bank account just waiting, is the value of that dollar amount decreasing at a higher rate than the potential appreciation on a home? Inflation vs appreciation

4. Are home values going to shoot up again when rates drop and every buyers mom, sister and monkey hop back into the real estate market? With the continuous low inventory? 

Here’s what I’m personally doing.. I’m looking for homes listed under $400k and negotiating 3-4% of my offer price to go toward my closing costs and downpayment, so I’m saving cash. I’m offering below list price according to number of days on market and of course comps, but offering low and communicating with the sellers agent to gage the level of desperation involved in the sale. I’m looking for homes in good areas that have room for growth in the next 4-5 years and not a whole lot of space to decline in value if the market tanks. 

Your sale price range will depend on your personal goal for your monthly mortgage, including interest rates. Im happy with a monthly payment between $1900-2400 with rates where they’re at for a few years, to refinance later on and take advantage of low sale price and the appreciation I wouldn’t be seeing if I wait another year or two. That monthly payment is less than renting these days so that’s also included in my rational. 

Of course if you have all cash in this market, that’s a different ball game and from what I’m seeing, you can negotiate a fair price and lock in some pretty good investments. 

However, I won’t make any claims about what will be best for your personal financial situation, only you can decide what you can afford and what risks you’re willing to take. At the end of the day, it feels like no one really knows what’s going to happen. Might be a risk, might significantly pay off *shrugs* 

I’m unsure at this point if anyone knows what’s going to happen this coming year..