Ask the Realtor: The January '23 "Head Fake"

I heard inflation is coming down! Right? RIGHT?!

​If you follow the real estate market at all, you may have heard headlines to this effect in the news. And to be completely honest, it sure seemed like that may have been case. Mortgage interest rates came down to near 6% (some were in the high 5s!), The Fed felt the moves they made were having an impact, and it seemed that the inflation slowed down. 

Until it didn't. 

**DISCLAIMER** This is not intended to terrify, but rather clarify what we're seeing in the real estate world right now. 

Over the last week or so, I have been watching the latest data to see what is going on. What I can say is that what we saw in January 2023 *may* have been a "head fake." Meaning, one month of change in the right direction is just one data point in what is a complicated situation for our economy. Here's what ended up happening in February, and all are things The Fed doesn't want to see:

-Consumer spending is up (1.8%)

-Unemployment rate hits a 53-1/2 year low...Fed wants this to be higher

-Inflation didn't slow as much as they wanted in January (aiming for 6.2%, came in at 6.4%)

The prediction is that now we may see The Fed make a 50 basis point adjustment in March, which will trickle down into the mortgage rate world and potentially cause rates to increase.

What does this mean for you as a person who wants to buy property, is looking to sell, or owns property?

If you WANT to buy property: If you can afford it and you need to make a move (lifestyle changes, necessity to move, etc), consult with a lender to see what is possible. There are tools (like 2/1 rate buy-downs) that may be an option for you to make things a little easier in the short term. The important thing is to judge your purchase based on your monthly payment. What can you afford each month?

If you're looking to SELL: Due to increased interest rates, we may see buyer activity slow down while inventory goes up. In Portland, our total time on market (aka: how long it takes a home to sell) is going up. In January '23, the Portland Metro Area average was 66 days on market, up from 55 days in December '22. Be prepared to price competitively, and be prepared for buyer negotiation. Remember, no amount of amazing marketing can outrun bad pricing strategy!

If you OWN a property now and want to know what is going on: How long do you want to stay in your home? If you're there for a while, know that real estate is a long term investment. Keep an eye on the market, and expect that in the local area we may see a modest decline. Don't let that scare you...we saw incredible appreciation (historically off the charts) over the last couple years. If we think about the last 50 or so years, there's not a point in time where, even after recessions, that real estate didn't increase in value.

The bottom line? Headlines in the news are not nearly enough to explain what is happening in the real estate market right now. 

If you're looking ahead to selling your home in the Portland, Oregon metro area in the near future and aren't sure where to begin, I'd love to connect to help you start off on the right foot. I'm Jennifer Schurter, a Realtor and expert marketer in the Portland, Oregon metro area. Let me put my 12 years of brand and media expertise to work for YOU on the sale of your home.

Jen@JenSchurter.com