State of the Market January 2023

2023 is here! What now? What is happening with the Real Estate market?

I will tell you!

Interest rates are much higher than they used to be; the last quote I got was 6.5% for a 30-year fixed with 20% down.

Now look at the graph below, they used to be much higher, and buyers were still buying. Yes, it sucks that they doubled, but this is the new reality.

There are buyers out there, and I have been showing my listings. Inventory is still low, and the result of high-interest rates is fewer buyers wanting to buy, but also fewer sellers wanting to sell since they need to go somewhere after they do.

So Who is buying now?

  1. People that have cash. Interest rates don’t matter to them,
  2. Investors who are looking at the strong rents and are scared of the stock market.
  3. Buyers who are qualified and have more leverage now to make offers, They can refinance once rates are lower in a couple of years or use a buy down loan.
  4. People that don’t like renting and think renting is throwing money in the trash, there are a lot of those out there.
  5. Buyers doing 1031 exchanges.

Who is selling?

  1. Sellers that are overstretched as their crypto and stocks are in the red, and they are starting to get margin calls and need the cash.
  2. Sellers that want to move up/down or to another state and have cash or are willing to pay higher rates to refinance later.
  3.  Sellers are doing 1031 exchanges.
  4. Sellers that want to have liquid cash.
  5. Sellers that think the market will go down and want to sell the top to buy lower in the future.

Whatever your reasons are, Real Estate is a long-term investment and goes up in the long run.

People will always need a place to live.


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