2022 was another interesting year for the Dunwoody real estate market. It picked up right up where 2021 left off. As the Federal Reserve struggled with inflation and began signaling to the US that interest rates were going to have to increase, buyers rushed to the market in the first three months of the year as if it were the typical spring/summer buying season. All this was in an effort to lock in those attractive mortgage rates before they began to increase. And increase they did! The average 30 year conventional mortgage rate at the beginning of 2022 was 3.3%. At the end of 2022 that rate was 6.5%. That is an increase of borrowing costs for buyers of almost 100%. And that is down a little from the October high of 7.4%. Needless to say, when the interest portion of a mortgage payment nearly doubles for the average buyer in less than a year, the market has to slow down. That has happened and that is exactly what the Federal Reserve intended to do.
Just as we entered a state of uncertainty on pricing in late 2020/early 2021 when rates decreased so quickly, we are very much in a state of pricing uncertainty due to the rapid increase in rates. Bob down the street looking to sell his home still wants this summer’s prices when rates were still in the 4’s, but Betty the buyer looking to move to our lovely town can’t qualify to make that payment now with interest rates in the 6’s. So we must move forward and slowly reconcile seller’s wants and buyer’s ability to pay for it in 2023.
As we move into 2023 don’t let this keep you from living where you’d like to be. If you have a home to sell in order to buy a different home in the area, the good news is that if prices are down you may get less for your current home but a better deal on the one you are buying. If prices increase due to a shortage of inventory and potential lower rates again, well you may get more for your current home, but you’ll likely be paying more for your dream home too. The only folks that should be uncertain of when to move are renters.
If you have any specific questions about the market or your situation, please don’t hesitate to give us a call. Calls cost you nothing and we have a wealth of knowledge on the Dunwoody and surrounding markets that we will happily share with you.