Many homeowners that want to sell their homes are wondering whether to list in the first quarter of 2023 or to wait.
The answer is different for every homeowner. Factors in the decision making process include:
- Is the homeowner going to be purchasing another home in the near future?
- Urgency of the move.
- The mortgage interest rate on the homeowner’s current mortgage.
- Amount of equity in the home. If the homeowner purchased at the top of the market will there be sufficient equity to pay off the mortgage and selling expenses?
Timing the Market
Many homeowners want to sell their home at the top of the market. However, if the homeowner is purchasing another home in the near future, the home they are purchasing will also be priced at the top of the market. Most homeowners that are selling will purchase another home, so timing the market is irrelevant. Even if the homeowner is not purchasing another home timing the market is not a good strategy, because it is impossible to predict the top of the market. And over time, the market in Greater Boston has always recovered.
Will the Market be Better in the Second Half of 2023?
Maybe. Or maybe not.
The Federal Reserve is planning on further interest rate hikes in 2023, taking the rate from 4.33 to over 5 percent by the second half of 2023. From an interest rate perspective now may be a better time to sell than in the second half of 2023. The Federal Reserve’s policy is to curb consumer demand to reduce inflation, even if it causes a recession. The risk of a recession is a very real threat.
Today’s Local Market
Although the market has shifted to a buyer’s market in other parts of the United States, the market in Greater Boston remains a seller’s market. The supply (too little) and demand (too much) imbalance in Greater Boston is still a reality in early 2023.
Supply is constrained by a wide range of factors including lack of buildable land, restrictive zoning, permitting red tape and delays, stringent energy and building codes, high construction costs, and homeowners not able to find a suitable replacement property. Proposed legislation such as increased linkage fees and transfer taxes are likely to make supply even tighter in the future.
Demand, although not as high now due to increased interest rates, remains strong. Increased salaries for buyers are helping to offset increased interest rates. The desire for more space for home offices remains due to hybrid work scenarios. This supply and demand imbalance is generating bidding wars in early 2023.
If you are thinking of selling in early 2023 market conditions are favorable. There is currently a large pool of highly qualified buyers (many all cash), that are ready to buy. Please contact if you would like an updated estimate of the value of your home.