For the first time in a long time, or maybe ever – we all have a crystal ball. We all know that interest rates will continue to climb and home prices are beginning to fall nationally. Most are predicting this will continue through 2023.

We haven’t experienced a price correction yet in Orange County….but it is coming. To what extent will the housing prices correct? We still don’t know. NYC has already experienced a 0.6% decline…which is pretty mild compared to the bubbly markets.  Our region, including NYC hasn’t experienced an influx of inventory like other markets, keeping the housing supply at historically low levels. Yet affordability remains the issue. As affordability wanes, so will home prices.

Some areas of the West have already experienced price corrections upwards of 10%. The frothy markets were hit first, and the hardest. The economists are predicting this will now spread nationally, especially to the lower and median price points of the Northeast. Yes, that’s us. They argue that rising fuel costs will impact affordability, especially for those who commute. Again, that’s us.

It seems to be a shared sentiment from many folks I talk to that it is a bad time to buy or sell. That couldn’t be further from the truth.

Listen, all sellers looking to list missed the height of the market. That was 6 months ago.  We can’t go back in time.

If you are currently looking to sell within the next couple of years, THIS is your time. You will most likely gain the most equity now then you will for the next 8 years. If the home prices fall by 10%, what would that 10% mean to you? 40K,50k,60K?

There are still buyers out there (despite what the media is saying). Depending on price point, some areas in the Hudson Valley are experiencing multiple offers, going over asking. But, this won’t be the case for long.

All the more reason to sell NOW.

So, that brings me to our Buyers…..should they still proceed? And the answer is yes. Right now interest rates are around 7.5%. A 350K mtg will cost you $2,447.

We know the Feds will not stop raising interest rates until the inflation is curbed,,,,  

…So let’s say you wait to buy until some point next year. Let’s say home prices fall by 10%. So now, instead of a 350K mortgage, you need a 315K mortgage. Let’s say interest rates are now 10.5% - That puts your payment at $3,202. – That’s $755 more a month for a mtg that’s 35K less!!!

Bottom line, if you are planning on staying in this home for longer than 3-4 years, Buy NOW. – Lenders have products (ARMS) that can lock in your rate for 10 years, that bring the rate down from 7.5% to 4.5%.  Once the market corrects, the Feds will start dropping rates again, and you can refinance. One thing’s certain though, rates will not return to 2%. We may never see that again in our lifetime. That was a unicorn market fueled by the Pandemic.

Bottom Line: Don’t let fear get in the way of making a move. You want to move south? West?  Follow your kids to college? Be closer to your family? Buy your first home?  Just do it. If there’s anything we’ve learned during the pandemic is that life is too short. Seriously, don’t wait, and wait….and wait, because eventually we’ll all croak!

In the meantime, I’m here to help! As an industry, we’ve seen thousands of realtors opt out of the business. I’ve worked through the great recession of 2009, and will continue to be here for you now. I love what I do – so give me a shout if you need me. I’m in this with you. - Brian