Local real estate market seeks rebound amid higher interest rates
Since the COVID-19 pandemic, few sectors have been buffeted by the whims of the economy quite like the real estate market — both locally and nationally. The real estate market has been experiencing a period of uncertainty due to higher interest rates, both locally and nationally. In 2021, record-low interest rates opened the doors for nearly 7 million homes, according to data from Statista. However, the Federal Reserve increased its benchmark interest rate 11 times over the next two years to control consumer prices, leading to 2023 becoming the slowest year for existing home sales nationwide since 1995. Some local real estate professionals believe that there is more to the market than what might have been seen. They predict that the market in 2024 will become more favorable for both buyers and sellers.
प्रकाशित : दो महीने पहले द्वारा Andy Knight The Herald Bulletin में Finance
ANDERSON — Since the COVID-19 pandemic, few sectors have been buffeted by the whims of the economy quite like the real estate market — both locally and nationally.
In 2021, record-low interest rates opened the doors for unprecedented numbers of buyers. Nearly 7 million homes changed hands, according to data from Statista, an online platform specializing in housing research.
But over the next two years, the Federal Reserve raised its benchmark interest rate 11 times in an effort to rein in consumer prices after inflation peaked at 9.1% in 2022. One result: 2023 became the slowest year for existing home sales nationwide since 1995, according to a report from U.S. Bank Wealth Management.
Last year, mortgage rates fluctuated between the low 6% range and nearly 8% for much of the year, creating uncertainty for potential buyers who had seen their purchasing power diminished. But according to some local real estate professionals, there was more to the market than what might have met the eye.
“Every market is local and different,” said Candy Bair, an agent with RE/MAX. “It’s fair to assume the cooling markets in other areas stem as much from what people think is happening as it does from what is actually happening.”
According to data from the Metro Indianapolis Board of Realtors, annual closed sales in Central Indiana were down 17.8% in 2023 compared to the previous year, while pending sales were down 16.1% year-over-year.
Madison County, Bair noted, has struggled with low inventory for several years. Higher interest rates may have slowed sales, she said, but sellers in many cases still felt pressure — due to job changes, life circumstances and other factors — to make a move.
“A lot of homeowners already have a lot of equity built into their properties, so you should have a lot of people making a lot of money when they do sell,” Bair said. “Interest rates shouldn’t be what determines the right time to buy. Being financially stable should.”
With fears of a recession largely curtailed, Bair said she anticipates the market in 2024 becoming considerably more favorable for both buyers and sellers.
“Today, buyer demand is still greater than the housing supply and it’s going to be that way for a long time,” she said. “New construction can’t keep up. Home prices locally will continue to rise until the supply-demand dynamic changes.”
विषय: Real Estate, Markets