As we dive into the third quarter of 2023, it’s a perfect moment to reflect on the housing market’s journey so far this year and project what lies ahead. The real estate landscape has been marked by some notable shifts, and understanding these trends can help both homebuyers and sellers make informed decisions in the coming months.
The second quarter of the year saw a significant rise in mortgage interest rates. Starting at 6.32 percent in early April, the average 30-year mortgage loan rate climbed to 6.84 percent by late June. Alongside this, the national median home price rose from $375,400 in March to $396,100 by May. These changes in rates and prices have set the stage for an intriguing Q3.
Experts are cautiously optimistic about the upcoming quarter. Despite traditionally buoyant summer months for real estate, Q2’s elevated rates led to a somewhat subdued environment. The ongoing challenge remains a severe shortage of housing inventory, with new listings for sale hovering around 25-30 percent below last year’s levels. This scarcity of homes, coupled with higher mortgage rates, suggests that the third quarter of 2023 might not witness robust home-buying activity.
Mortgage interest rates, a pivotal factor, are projected to remain within the 6.4 to 6.7 percent range for a 30-year fixed mortgage, according to financial analysts. While recent data suggests that inflation may ease in the coming months, leading to a potential drop in mortgage rates, the predictions vary. Some experts believe rates could even dip below 6.5 percent, while others expect them to hover around 6.75 percent initially and eventually decline toward 6.0 percent by September.
The lack of housing inventory will continue to exert pressure on home prices throughout Q3. Buyers may encounter fierce competition, with a higher percentage of homes selling above the asking price. While home price growth is predicted to average around 4 percent this year, median home prices are anticipated to slightly decrease, settling around $385,000 in Q3.
For potential homebuyers, the current market presents affordability challenges. High home prices combined with elevated mortgage rates mean careful consideration is essential before making a purchase. Experts advise potential buyers to ensure job stability and steady earnings before committing to a home transaction.
On the flip side, sellers continue to have the upper hand in many markets due to tight inventory levels. However, sellers should weigh the benefits of selling against the potential challenge of finding a new home in a market with elevated rates. The decision to sell should take into account the balance between current low mortgage rates and potentially higher ones in the future.
The real estate market in the third quarter of 2023 promises a mix of challenges and opportunities. While the housing shortage and increased mortgage rates pose hurdles, the potential for stabilized or slightly reduced home prices may provide some respite for both buyers and sellers. As you navigate this complex landscape, remember that careful consideration and expert guidance are essential to make the right decisions for your unique circumstances.
Selling your home can be a daunting process, especially if you’re not familiar with the real estate world. With this guide, we aim to simplify the journey and provide you with valuable tips to ensure a successful sale while avoiding common pitfalls.
Set the Right Price
Overpricing your home is a common mistake. Instead, research comparable properties in your area and set a competitive asking price. Studies show that properly priced homes sell faster and often for more than overpriced ones.
Create a Welcoming Atmosphere
During showings, give potential buyers space to explore without your presence. Allow them to envision themselves in the house without feeling observed. Remember, first impressions matter, so declutter, stage, and enhance curb appeal to make your home look its best.
Emotion vs. Objectivity
While you may have invested time and money into upgrades, buyers assess your home based on its current condition and comparable properties. An experienced agent can help you detach emotionally and set a reasonable price.
As the majority of buyers start their search online, high-quality photos are essential. Hiring a professional photographer will showcase your home in its best light and attract more potential buyers.
Choose a Skilled Agent
Partnering with an experienced real estate professional is crucial. They can guide you through the process, help with pricing strategies, marketing, negotiation, and handle paperwork efficiently.
Feedback is Valuable
Be open to buyer and agent feedback. If a consistent issue arises, like lighting or color choices, consider making adjustments. Adapting to feedback shows your commitment to meeting buyers’ preferences.
Study the market and comparable home prices in your area. Price your home realistically, considering market trends and recent sales. Slightly underpricing can attract more buyers and lead to quicker sales.
Don’t DIY Marketing
Utilize a variety of marketing channels, including online listings, to reach a wider audience. A strong online presence increases your home’s visibility and generates more interest.
Selling your home requires a balanced approach between emotional attachment and practical decision-making. By setting the right price, presenting a well-maintained home, using professional resources, and listening to expert advice, you can navigate the process smoothly. Remember, the real estate market is data-driven, so staying informed and adaptable will increase your chances of a successful and profitable sale.
If you’re looking for a great deal in a tough real estate market, buying a foreclosed home may be the best option. While the main benefit of purchasing a foreclosure property is the price, the process is more complex than with a traditional real estate listing. It’s important to know what to look for and how to buy a foreclosed home if you want to get the best deal. Here are five tips to keep in mind when buying a foreclosed home.
It is often difficult to access these properties before they become available for sale.
Many people think there must be a secret way to get access to foreclosed properties before they go on the market, but the reality is that most of these properties are owned by large financial institutions that have a lot of other assets. These companies tend to outsource the entire foreclosure process to a management company, which includes hiring a local Realtor to evaluate the property before it is listed. Local banks may be able to provide information on who’s handling the foreclosed property, but this is the exception rather than the rule. So this means it can be difficult to access these properties before they become available to the public.
Make sure that you are actually getting a good deal.
When it comes to buying a foreclosure, it’s important to ensure that you’re actually getting a good deal. Contrary to popular belief, foreclosures are not always the best buy. In fact, most foreclosures are listed on the open market, meaning that the visibility and demand for them are the same as you would expect with other properties. The price of foreclosures is set at the highest possible value in order to meet the needs of the bank and the listing agent. Therefore, it’s important to remember that foreclosures are not being offered at discounted prices.
Conduct a full property inspection, including all utilities.
Before you purchase a foreclosure property, you should get a full inspection done with the utilities turned on. Make sure the house has been winterized, and you can access the furnace if necessary. Be aware that you may need to purchase special access to get the utilities going, which can be costly and time-consuming.
Prepare for the worst if purchasing a home as-is.
If you’re buying a foreclosure in “as-is” condition, you should prepare for the worst. Although no inspection is required, it’s a good idea to have a contractor evaluate the home and estimate the cost of any repairs. An inspection can identify major issues that the bank isn’t aware of, so it’s worth considering. This will help you decide whether you want to proceed with the purchase or walk away from the deal. To make sure you have room to cover repairs and other costs, look for a foreclosure home within the lower end of your budget.
Get a preapproval letter.
If you’re thinking about making an offer on a foreclosure, it’s important to have a mortgage preapproval letter in hand. This letter will outline information about the amount you are able to borrow based on your credit score and income. With foreclosures, the best deals often go quickly, and buyers need to have their financing worked out beforehand. Real estate investors who pay cash are usually the ones to take advantage of these deals.
Are you looking to expand your real estate knowledge? Podcasts are an excellent source of information on investing, home improvement, and the latest housing news. With so many real estate podcasts available, it can be a challenge finding ones that are worth your time. To make it easier, here are 10 of the top real estate podcasts that span a range of topics related to property and housing.
The Indicator from Planet Money
For those looking to gain a better grasp on business and economics and work in quickly and easily understandable terms, check out The Indicator from Planet Money, a 10-minute podcast that explores “big ideas” related to the economy. Topics include home sales, moving trends, the commercial market, and renting, with each episode featuring data releases or findings and how they affect consumers and the economy. Perfect for buyers, sellers, homeowners, and investors.
BiggerPockets: The Real Estate Investing Podcast
The BiggerPockets Real Estate Podcast is a popular weekly podcast that features informal and fun interviews with a variety of investors and entrepreneurs. Guests range from well-known names like Matthew McConaughey and Ken Corsini from HGTV’s “Flip or Flop Atlanta” to industry players who share their experiences and advice. Hosted by Rob Abasolo and David Greene, this podcast is perfect for beginner and intermediate investors.
Real Estate Today
Real Estate Today is a radio program and podcast hosted by Stephen Gasque, the broadcasting and multimedia communications director for the National Association of Realtors. With hundreds of episodes, the program covers topics such as purchasing a second home, home buying for millennials, maximum selling secrets, creating a smart home, and first-time buying. This is a great resource for buyers, sellers, homeowners, and investors.
This podcast is the perfect resource for homebuyers, both first-timers and repeat buyers. Hosted by Dan Moralez, a mortgage expert and loan officer in Michigan, it covers topics such as credit repair, getting preapproved for a loan, mortgage comparison shopping, and tips for self-employed homebuyers. With over 150 episodes, it offers a wealth of insider secrets and helpful advice to make the home buying process easier.
Martini Mortgage Podcast
The Martini Mortgage Podcast, hosted by lending expert Kevin Martini from Raleigh, North Carolina, offers listeners a wealth of knowledge and advice on the ins and outs of getting a mortgage loan and purchasing a home. Over 150 episodes, listeners can learn about topics like winning bidding wars, improving credit, tax credits for first-time buyers, avoiding forbearance, and home affordability. Ideal for sellers and buyers, this podcast is a great resource to help navigate the homebuying process.
The Money Pit Home Improvement Podcast
This podcast, which is also a nationally syndicated radio program, focuses on home improvement and repair. Hosted by experts Leslie Segrete and Tom Kraeutler, the podcast covers a wide range of topics related to homeowners and DIYers. Popular episodes from the over 1,500 available include four popular home improvement hacks, stress-free closet organization, germ-free faucets, high-return home improvements, and the best kitchen lighting. It is perfect for homeowners planning to remodel.
The Remote Real Estate Investor
The Remote Real Estate Investor podcast is the perfect resource for remote and out-of-state investors interested in real estate. Hosts Emil Shour, Tom Schneider, and Michael Albaum explore a range of topics, from finding the hottest markets to analyzing properties from afar and avoiding common pitfalls. Perfect for those looking to invest in real estate without actually living near the property.
Making Money in Multifamily
If you are interested in investing in multifamily properties, you should check out the Making Money in Multifamily podcast. Host Dave Morgia is a real estate investor and interviews industry experts to discuss the practices and principles for successful investing in this field. He also dives into deals that didn’t meet expectations and why they failed. It’s perfect for those who are just starting out or experienced in multifamily investing.
Best Real Estate Investing Advice Ever
Joe Fairless hosts this popular podcast that has had over 3,000 episodes, offering daily real estate investing advice. His journey began with low-cost single-family homes, and now his portfolio is worth billions. This podcast provides insight into commercial real estate investing and helps listeners navigate through uncertain markets. It’s a great resource for both novice and experienced investors.
Real Estate News for Investors
This podcast is ideal for beginner and experienced real estate investors, as well as news buffs. Host Kathy Fettke, co-CEO of the Real Wealth Network and author of “Retire Rich With Rentals,” reviews the latest reports from national organizations and market data analysis to inform listeners about building and holding a real estate investment portfolio. Topics range from the best real estate markets to investing in property values and tax law, as well as news and information for real estate flippers.
Investing in real estate is a great way to achieve your financial goals. It can provide multiple strategies to make money and even become your primary source of income. For those with limited experience in real estate investing, getting started can be daunting. Fortunately, there are strategies available that are tailored toward beginners. Taking the time to learn the basics while investing in a beginner-friendly niche is a great way to slowly build knowledge and confidence. As investors gain experience and profits, they can then transition into more advanced strategies. For those just getting started in real estate investing, these strategies provide a great starting point.
Real Estate Wholesaling
Wholesaling is a quick and lucrative way to start in real estate, where a property is secured under market value and assigned to an end buyer for a fee. The wholesaler does not own the property and makes money through the fee added to the contract. Wholesaling involves building a list of potential buyers by using lead generation tactics like emailing, social media, and sending out direct mailers. This list is then used to get information, such as contact details, funding type, and buying criteria, about the investors. This information helps the business determine what deals the investors are interested in and how to get in contact with them. Wholesaling is a great option for beginners in real estate investing because it requires low capital to start and does not involve actually buying properties. It also provides an opportunity to form a reliable network and gain an understanding of the local market.
Real Estate Prehabbing
Prehabbing is a form of real estate investing that involves minimal upgrades to a property, such as cleaning, painting, and landscaping, in order to make it more attractive to other investors. It is a low-cost way of improving property through sweat equity. Investors should look for properties with structural integrity that require minimal repairs while also keeping location in mind. Research the market and identify popular or up-and-coming neighborhoods to ensure the best return on investment. Prehabbing is a low-risk, low-effort investment option that can yield a quick return on investment. The goal of prehabbing is to sell the potential of a property, not the property itself.
REITs are a great way for new investors to get into real estate investing without having to commit full-time to the sector. They allow for the purchase of shares in companies that own income-producing property, providing regular dividends and the potential for above-average returns. To get started, research publicly traded REITs and evaluate their records yourself, including the company’s anticipated growth, current dividends, and funds from operations (FFO). It is recommended to consult with a financial advisor before investing. REITs are an excellent investment option for beginners as they provide an opportunity to benefit from real estate without having to purchase properties. They are also known for providing solid returns with low risk, making them a good way to diversify existing portfolios.
Online Real Estate Platforms
Online real estate platforms allow borrowers and investors to connect, allowing developers to post deals and projects that need financing via debt or equity, while investors can benefit from real estate investing without having to manage ownership or labor. This creates a win-win arrangement for all involved. Financing real estate deals can be a great way to diversify and potentially profit from real estate investments, but it is important to always do your research and be aware of the risks. Investors can choose to invest in single projects or portfolios and receive monthly or quarterly distributions; however, platform membership fees may be required, and the funds may be illiquid with lockup periods.
Purchasing Rental Properties
Investing in rental properties is a great way to earn a fixed monthly income by becoming a landlord. With the right purchase and market, you can cover all expenses and potentially have some profit left over. Rental property owners can have an active or passive income stream depending on their preference; they can outsource tasks such as maintenance and repairs to a property manager or do everything themselves to maximize income. House hacking is a form of investing in rental properties where the owner occupies one of the units and rents out the others, allowing them to qualify for a residential loan while earning rental income.
Real Estate Syndication
Real estate syndication is a partnership between investors to identify and purchase properties, usually with the sponsor managing the search, contract, and property, while other investors contribute capital. The sponsor provides skills and time instead of money. Investors in a syndication deal provide the funds to purchase a property and cover any required repairs or renovations. They take on a passive role and receive a return on their investment through periodic payments. Once the property is renovated and sold, the syndication aspect of the deal is completed, and the sponsors are paid an agreed-upon amount for their involvement.
House flipping involves buying a home below market value, renovating it, and then reselling it for a profit. HGTV often provides an introduction to the concept for those interested in real estate investing. Investors who want to flip houses should be aware of the risks involved, such as spending too much on renovation costs or not being able to sell the house due to price or market conditions. New investors should consider finding an experienced partner to help guide them.
Real Estate Investment Groups (REIG)
REIGs are businesses that specialize in investing in real estate by pooling together investor money to purchase multi-unit housing and commercial properties, as well as buying, renovating, and reselling properties for profit. REIGs are an alternative to REITs, offering investors more flexibility and the ability to diversify their capital sources through different investment strategies. They are attractive to investors who seek the returns of real estate without the burden of property management.