As we reach the midpoint of the year, we take a moment to look at the current and upcoming conditions of the market. Prices are still holding up well, but there aren’t as many homes available, which has caused about a 20% drop in the number of homes sold in Northern Virginia. With a few minor adjustments, the outlook for the rest of 2023 lines up the original forecasts from the beginning of the year.
There’s a buyer demand that suggests we will still remain in a seller’s market. However, it’s good to keep in mind that this demand might not be as strong as the last two years. Some households are finding it hard to afford homes because of mortgage rates, and others are still getting over the disappointment of missing out on those really low 30-year fixed rates of 3% or even less. Buyers seem to be adapting to higher mortgage rates, which historically are within the norm. Nonetheless, we’ve grown accustomed to lower rates over the past few years. On top of that, rent prices continue to increase. When we look at the bigger financial picture, buying a home can still be a smart choice for many.
Thinking about the months ahead, we should expect there to be fewer homes for sale and a bit of a drop in sales. However, this drop won’t be as big as what we saw in the second half of 2022. Prices are likely to stay about the same, with the potential for a nominal increase. Again, this is driven by the conflicting influences of affordability and sustained demand.
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