The real estate market has been having a great week, especially for home owners and sellers. According to the MBA, mortgage applications have increased by 27.9% in the second week of January, which confirms that buyers are ready to roll while sellers are waiting for the spring market. In Massachusetts, there is currently a 40% undersupply of homes compared to typical inventory at this time of year. This means that any seller who lists their property now has a huge advantage.
At the same time, interest rates for 30-year fixed mortgages have dropped to 6.11%, and for 30-year jumbo loans, they have dropped to 5.66%. This means that buyers may be able to get an incredible rate for a home purchase, depending on their purchase amount, down payment, credit score, and assets.
There are different predictions for the housing market in the future. Goldman Sachs is predicting a 10% decline, Moody’s is forecasting a 5.1% decline, but the source I am siding with is Zillow, who is predicting a 1.1% decline. Zillow has access to Showingtime, which allows them to see how many showing requests are done on a daily basis and they can also track the search activity on their website.
If you are a home owner who bought your property in 2021 or before, you have a lot of equity in your home and in the Boston area, I believe that in 2023, it will at least be flat or have another year of appreciation. If you are thinking of selling your property, now is the time to do it as supply is low in the winter months but buyer activity is picking up at a blistering pace.
If you are looking to buy a property this year in the Boston area, understand that competition will be intense, especially for single-family homes that are close to the median price in that area. One secret tip is to wait until the last minute to submit your offer. Before you do, have your agent call the listing agent and get a pulse on what activity was like and try to find out how many other offers there are. Based on the information your agent gets, you can then decide how aggressive to be in the offer you submit.