Market UpdateHomeowner

November 18, 2022

Seasons Change, Markets Change

In the Northeast, seasonality plays a significant role in the housing market as it impacts housing demand and supply. Historically, summer has always been a frenzy with transactions and prices, while activity starts to slow down heading into the holidays. This season is no exception. We were still seeing decent inventory levels through mid-October, but the seasonal shift has definitely become apparent in our local market.

Our hot take on the current market: buyers that were actively searching over recent months, and even during the pandemic were finally able to secure a home once the market began to soften this fall. The willingness of new buyers to compete at the same level as the pandemic frenzy has dropped considerably in lieu of recent hikes in interest rates. While the Fed has taken an aggressive approach to inflation control (with another ¾ % increase on 11/2), new buyers requiring financing are proceeding with passive caution before making a move.

Sellers: this is not 2021. Buying power has softened and while demand still outweighs supply, price reductions and concessions are on the horizon. On a national scale, home sellers on average have accepted offers below their list price over the past month - a further indication of rebalancing in the housing market. Nevertheless, the market will continue to remain competitive due to tight inventory, however pandemic pricing with waived contingencies will be a thing of the past.

While this might spell bad news for sellers, it is welcomed news for buyers. Unfortunately, buyers still have those high mortgage rates to contend with. If prospective purchasers sit on the sidelines as a result, the silver lining will be an increase in housing inventory, which in turn could put further pressure on sellers to lower their prices - all of which signify a long-overdue course correction for the housing market.

If you are feeling like you missed the boat to sell your home, rest assured, we are by no means out of the harbor. This softening of the market is normal and needed for our current economy. While ambitious pricing will likely fall under market scrutiny, strategic sales will still reap tremendous rewards for home sellers in the upcoming months.