Brooks & Heinze Real Estate Team – Year End Newsletter

Market Update

What a year it’s been in real estate. As 2022 is wrapping up we look back at the changes this year has brought and look ahead at what 2023 might look like.

2022 – We started 2022 at all-time inventory lows, forcing intense buyer bidding wars until mortgage rates rose from 2.5% to over 6+% in a matter of just a few months and took the fire out of the market. Buyers waived inspection and other contingencies and made offers well above asking the first quarter of the year. As mortgage rates moved up, multiple offers subsided and buyers once again were able to negotiate fair prices and do their due diligence rather than rush into a risky purchase. Sure, there has been a decent price correction but for buyers who had hoped for a major crash before committing to a purchase this year, their hopes did not come true in 2022. In recent weeks, mortgage rates took a slight downward trajectory, as softer inflation data was reported.  The good news for the housing market is that recent declines in rates have helped in reducing financing costs, however, buyer demand remains weak in the face of affordability hurdles that are still quite high.

2023 – Is the coming year a good time to buy or sell? Many homeowners are in good financial shape and have a lot of equity in their home. These homeowners will likely stay put rather than sell in the shifting market BUT some homeowners may need to sell. Those who are negatively impacted by the economy (i.e, job loss, inflation) or personal hardships (i.e., health crisis, divorce, death) might have a tough time making ends meet and have to sell their property quickly. Such sellers who have little equity, might even contribute to us seeing short sales or foreclosures again. 2023 might not turn out to be a buyer’s market, but we are sure buyers will have more negotiation leverage with a seller than in 2022.

Probably the most accurate real estate predictions that can be made is that nobody will be able to accurately predict what will happen to the real estate market and that only time will tell because there are so many factors involved, such as mortgage rate changes, new and continued unemployment claims, inflation, world economic events, just to name a few. 

Conforming Loan Limits Rise for 2023

The Federal Housing Finance Agency (FHFA) raised conforming loan limits for 2023. The maximum conforming loan limit for one-unit properties in most parts of the U.S. is now $726,200, up from $647,200 in 2022. In high-cost areas, the ceiling loan limit for one-unit properties is $1,089,300. The limit in Seattle is $977,500. The conforming loan limit is the maximum amount you can borrow on a loan backed by Fannie Mae or Freddie Mac. Loans that adhere to Fannie and Freddie’s requirements are an attractive option for buyers because they are typically easier to qualify for and may offer lower interest rates. With the new, higher limits, more borrowers will be able to qualify for a conforming loan and take advantage of the increased purchasing power.

We’d love to hear from you

Any questions, comments, or feedback? Contact us any time.

We are looking forward to what the housing market has in store for 2023 and all the new opportunities it will bring with it!

Happy Holidays,

Kerstin ❄ Krisanne

Brooks & Heinze Team

at Skyline Properties, Inc.

Kerstin Brooks: 206.276.5827

Krisanne Heinze: 206.920.2541

Email: info@propertyinseattle.com

Web: www.propertyinseattle.com