Experts Predict Spring Market Could Be Last Hurrah for Massachusetts Sellers
Sell Now or Forever Hold Your Peace?
As a local real estate attorney, I’m asked 3 questions almost every day:
1. How long will this crazy seller’s market last?
2. Will interest rates keep going up?
3. Honey, is that really what you’re wearing to work today?
The answer to Question 3, like the origin of the universe or why the Kardashians are famous, may never be known. However, predicting when this historical seller’s market will end appears much easier to decipher.
Since the spring of 2020, we have lived in an alternate universe where a Massachusetts homeowner can expect to list their home on a Tuesday, receive 15 over-asking offers on Wednesday and close in 3 weeks – or, if they prefer, 6 months.
Unfortunately, it appears the end of the wild joy ride for Massachusetts sellers may be just around the corner.
A Hard Rain's A-Gonna Fall?
Over the next 12 months, 2 factors will tip the seller/buyer equilibrium back toward buyers according to industry experts:
Rising Interest Rates
Soaring Home Values
What do these conditions have in common? They both reduce home affordability. But how does reduced affordability benefit buyers?
Right now, clearly, it doesn’t. But change is coming, and here’s the chain reaction:
Reduced home affordability --> Means fewer buyers --> Leads to reduced demand --> Price Curve Flattens
The Mortgage Bankers Association predicts that conventional mortgage rates will continue to rise incrementally through the end of 2022. In addition, industry experts believe prices will continue to rise in 2022. Though opinions differ on the rate of increase, they all agree on one thing: 2023 will spell the end of this crazy-train market sellers have been enjoying for 2+ years.
Timing is Everything
Fortunately for sellers, experts expect “crazy-train” to continue through the spring market into summer.
After that, exactly when we return to a market where buyers do home inspections again is uncertain, but it will happen. So…. the message for all those sellers who have been frozen in place afraid to venture into a wild west market is this: the upcoming spring/summer market may be your last chance to ride the crazy-train...
To learn more about this critical topic, register for our upcoming class National Economic Trends: Local Impacts on Real Estate. Agents earn 2 CE credits. Hope to see you there.
This article is intended for general informational purposes only and should not be construed as legal, tax or other professional advice. Prior to acting on any information in this article, you should seek legal, tax or other relevant professional counsel.