Real Estate Deal Killers 2023 Edition
Considering a home purchase in 2023? Like with any purchase, current market knowledge is key. Let's take a look at some of the challenges (and solutions) to the 2023 real estate market.
- Higher Interest Rates--Over the past few years interest rates (the cost of borrowing) has been kept artificially low. Sellers who were able to lock in 3% are hard pressed to purchase a new home at 8%. Likewise for buyers the higher rate means a lower purchase price.
- Increased Insurance Cost-- Thanks to a string of natural disasters, insurance companies are feeling the pinch. Combine this with overall inflation means MUCH higher insurance rates.
- Lack of inventory-- Depending on the market, overall listing count is down 30-50% below Pre-Covid norms. Lower inventory is keeping upward pressure on pricing even in the face of higher rates.
- General Economic Uncertainty-- World events and negative economic news litters the media. Going into an election year expect more of this.
So what does all this mean. Is real estate dead? Is homeownership a hobby of the BabyBoomer generation? When I consult with home buyers in Destin Florida here is what we discuss...
1) Take Stock of YOUR financial position-- Is your job secure (relatively speaking)? Do you have a bunch of high interest debt (credit cards, medical bills, student loans)? How long do you plan on living in the area? The buyer's response will determine the appropriateness of a home purchase.
2) Solve the interest rate dilemma- I am not one to advocate "date the rate, marry the house". None of us have a crystal ball. Rates may NEVER come down, or perhaps they will. Get prequalified based on TODAY'S rate. If they go up later who cares? Your rate is (or should be) locked. If they decline simply refinance.
3) Find the Needle in a haystack-- During the last 18 months or so I have been finding more off market homes for my buyers. What's the best way to get a good deal? Not having to compete with a baker's dozen of other home buyers!
4) Get Insurance Bids EARLY in the process-- In the "good old days" insurance quotes were one of the last steps in escrow. Today I encourage to get bids as soon as a contract is accept.
Markets are always shifting one direction or another. The key is having an experienced agent guide you through the process. Need a top agent in Destin Florida? Call Doug Rogers (318) 613-1994. Prefer to start the process online? Go to Destin Real Estate to explore properties listed on the local MLS.