One of the most significant challenges facing the real estate market in Q2 2023 is the shortage of available homes for sale. The issue of low inventory really came as a result of the 2008 financial crisis when so many builders went under or left the industry. It was a dead market for a long time and we are now struggling to make up for those lost years. The pandemic also increased the shortage as many people stayed in place that would have otherwise moved due to concerns about health and safety. The result has been a competitive market with high demand, multiple offers, and bidding wars. This trend is expected to continue in Q2 of 2023, and potential home buyers will need to act quickly and be prepared to offer competitive bids in order to secure a home.
Rising interest rates is another key factor that is influencing the real estate market in Q2 2023. While rates remain low compared to historical averages, they are still more than double what they were a year ago, and home prices have not diminished as much as predicted.
With that being said, these rising interest rates are unlikely to have a major impact on the real estate market in Q2. Rates are more stable now and the federal reserve has slowed down hiking the funds rate compared to last year. As long as the overall economy remains strong, buyers are likely to continue to invest in real estate, even as rates rise because real estate is a relatively stable investment that offers a hedge against inflation.
Overall, the real estate market in Q2 2023 is likely to continue being shaped by tight inventory and interest rates. Buyers will need to act quickly and be prepared to make competitive offers in order to secure a home, while sellers may have more leverage in negotiations. As always, your Cook & James team is here to guide you through the process. Visit our contact page to get in touch or follow along with us on social media for real estate updates, tips, and explanations!