The The National Association of Realtors (NAR) released their US Economic Outlook going out to Q2, 2023. And it provides a glimpse into the 2022 real estate market with useful data points. The full report includes a breakdown of GDP, Mortgage Rates, Housing Indicators, etc.
I noticed a few things worth sharing:
* On the first line, GDP came in at -1.6% in Q1, 2022. Then it hit -0.7% in Q2. Two negative numbers in consecutive quarters defines a recession. And the 2022 real estate market hit those.
* If you look at the outlook moving forward it shows growth of 2.3% in Q3, and it remains positive moving forward. IF this is accurate, by definition, the recession would be over. But things don’t change overnight. It take months for new earnings reports and housing figures to soak in. And that could linger until Q1 before things are “less bad.”
* It shows mortgage rates in the 6% range for 2023. This could be our new normal. But at least the shock of rates doubling this year will be behind us. That could bode well for market sentiment as time moves ahead.
You see, one of the 2022 real estate market biggest event was the rapid rise in mortgage rates. If you blinked early in the year it was as if you landed on a different planet. But we knew that was coming as the Federal Reserve told us in late 2021 they were raising rates. Nobody paid attention until it was too late.
Home buyers who didn’t act by mid-February saw their monthly mortgage payments go up and up and up. What was a $1,600 monthly payment became a $2,200 payment in a matter of months. And it rose from there.
This rapid rise didn’t bode well for sellers either. They saw demand fall on a weekly basis. Open houses that were once jammed with hot prospects returned to normal levels. Yet at the same time, home sellers were unwilling to lower their prices. Those who didn’t became part of a new statistic: price reductions.
So things went from hot, to good, to bad… then back to not as bad all in the course of eight months.
What To Do In the Late 2022 Real Estate Market
What this means for home sellers is to not become complacent with your pricing strategy. Right now we are in the depths of hurricane season, and there are less buyers here. And, as I’ve been sharing, prices are dropping across the board. Don’t be one of those sellers who shoots for the moon, then starts dropping your price. By then it’s too late as buyers will wait to see how far you will go. You need to get ahead with a better selling strategy.
To help you, I published my new video, “How To Sell Your House Fast…” In it, I give a handful of ideas that could be useful to you.
For home buyers, it’s time to acknowledge you missed the boat with the lowest mortgage rates in history. You can’t go back. This is a new era you are facing… and it still looks positive.
Most of the “experts” like Fannie Mae, Freddie Mac, National Association of Realtors (NAR), CoreLogic revised their 5-year price forecasts UP! Earlier this year they were in a range of 3-7% appreciation increases. But as we start Q3, most are saying 10% – 16% is more realistic.
As for buyer-investors hunting in the Delray Beach area, take a look at this report. It ranks Delray Beach 2nd for AirBnB hosts. Our local market is dynamic and our future looks incredible.
So the 2022 real estate market outlook is looking solid. What was looking to be a major correction, or some saying “crash” appears to be just the opposite. Only time will tell, but the 2022 real estate market is resilient and is certainly making players in the game show up with as much local market data as possible.
If you’d like to learn more about our local Delray Beach 2022 real estate market… or about all things happening here, sign up for my weekly eLetter I publish each Wednesday morning. You may find it useful if you’re thinking about moving to, or living in, Delray Beach.
