Happy New Year!!! We hope that you enjoyed your holidays spent with family and friends. As I write this, it is the week between Christmas and New Year’s-a time that generally is slower and allows time to be spent with family and friends who have come into town to celebrate together. It is always a nice time to reflect back on the year and look forward to the year ahead. Following this time is the spring market which will typically start a few short weeks from now, so a bit of time to rest and reflect is always welcome. We hope you are able to take some time to do the same as finding quiet and reflective time in this fast-paced world has gotten harder and harder.
This holiday season, Kylie has been able to take a couple of weeks off at the end of the year for a much-needed vacation with her family. Thea has also taken a week off to spend time with her family in Cleveland. Next Christmas and every one thereafter will be MUCH different with a child. It is always so fun to relive the wonder, excitement and joy of Christmas through a child’s eyes.
Steve and Thea had a big day 2 weeks ago when they were sworn in as the Chairman of The Board of Directors and Chairwoman of the Young Professionals Council, respectively of the Westfield Chamber of Commerce! Westfield is the fastest-growing city in the state and one of the fastest-growing in the country and we are thrilled to take the helm together to help our city grow and represent fellow business leaders young and experienced make Westfield the best city around! Please connect with us if you have ideas to help make our community better.
As we start to prepare for the spring selling season, we have received quite a few questions from clients wanting to know what to expect. While no one has a clear crystal ball, this is what we have read, heard and seen from some pretty reputable experts and most of them have been pretty in sync with their predictions. We also tend to agree.
The interest rates the Federal Reserve have increased have absolutely had the effect they were intending and that is to cool an overheated market, including housing. While our housing market is still at an anemic 1.7-months of inventory compared to a balanced market of 6-months, the momentum has absolutely shifted to the buyers’ favor for the first time in almost 3 years.
Interest rates have fallen almost 100 basis points or 1% from their high a few weeks ago, which is great news! We are expecting them to continue to fall to around 5% by June of next year.
There will absolutely be more inventory hitting the market this spring as it always does, but we are still woefully short of what we need.
Builders have slowed building due to the drop off in buyer demand and their profit margins are shrinking quickly as the prices their subs charge are not decreasing, but the prices builders are charging buyers are decreasing and the incentives they are having to offer buyers are increasing. Both of these contribute to shrinking profits.
Due to the above, many, many buyers and sellers have sidelined themselves the past several months contributing to a lot of pent up demand. As interest rates decline these buyers and sellers will enter the market and we are likely to see a busy spring market again, which may include bidding wars.
Our market continues to appreciate even though pending and closed sales are seeing declines just short of 30% year-over-year.
Interest rate buy-downs have become the tool of the market right now allowing buyers to snag a rate around 4.5% for the first year, 5.5% for the second year and 6.5% for the rest of the term. Buyers are banking on the fact that interest rates will decline in the next 2-years and then they will refinance into a permanent, lower rate. While this is a risk, it is unlikely rates will not continue to decline.
Mortgage interest rates are tied to inflation data, which is showing inflation going down. This is why mortgage rates are dropping while the Fed is continuing to increase the Fed Funds rate.
If you are a seller, spring should be your friend. If you are a buyer, NOW is the time to buy before the feeding frenzy picks up again and you have lots more competition. Spring will bring more choices to buyers, however.
Nationwide, we are approximately 5-7 million homes short of what is needed.
As always, please let us know if you have specific questions about your house or buying plans. We are happy to consult with you about your specific situation and how you can make the most out of the market. Due to the crazy swings in the market, the automated valuation sites are more inaccurate than we have seen them in a long time. Your best bet is to have us come out to take a look at your house and give you specific data relative to your house and your specific market. We are happy to do this!
Don’t miss some of our upcoming events for January:
Steve’s Seller Workshop-The Top Ten Dumb Mistakes Smart People Make When Selling Their House. This interactive workshop will take you from house prep to going on the market and everything in-between. Join us on Tuesday, January 10th from 7-8:30pm via Zoom. E-mail steve@Welcome2Indy.com to register.
Thea’s Home Buyer Workshop-Everything You Need to Know to Buy A Home in Today’s Market. Join Thea on Wednesday, January 25th from 5:30-7pm via Zoom to hear the tips and tricks Thea teaches her clients to succeed in today’s market. E-mail thea@Welcome2Indy.com to register.
Our first Happy Hour of the year will be on the 4th Thursday of January due to a scheduling conflict on our usual 3rd Thursday. Join us from 5-6:30pm at Matt The Miller’s in Carmel as we toast in the new year and catch up with each other and hear about holiday festivities. E-mail kylie@Welcome2Indy.com to register.
From our family to yours, we wish you a happy and prosperous New Year. As always, if your plans for 2023 include a change in housing, give us a call. We would love to help!
Click here to read our January newsletter
Your Friends in Real Estate,
Steve, Kylie, Thea, and Mark
P.S. Please don’t keep us a secret!
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