What the heck is going on with the 2023 real estate market? From high interest rates and high purchase prices to elusive cash flow, this market includes enough uncertainty to spook new and beginner investors into thinking the best course of action might be to sit this cycle out.
Pro tip: Don’t sit out.
You know the old adage:
When’s the best time to plant a tree?
“20 years ago.”
When’s the second-best time to plant a tree?
“Today.”
Many expert investors will call this truth in 2023 in regard to real estate. For sure, this year has forced us to be more conservative and strategic than we’ve been in the past, but most say you’re still better off “in” than “out”.
We spoke to two experienced investing teams, Ali and Josh Lupo (aka theFIcouple), who invest in the Albany, New York area, and Megan Ahern (aka the Tatty investor), who invests in the Lincoln, Nebraska area with her husband Jeff, to understand the current market and get some advice on how to navigate decisions in 2023. They agree that these are the two constants so far this year.
- Interest rates and home prices are staying high: “The two biggest challenges are that interest rates have gone up dramatically over the last 12-24 months,” says Josh Lupo, “and that people think there’s a magical inverse relationship between interest rates and price and that prices should naturally come down when interest rates are high.” But that’s just not what we’re seeing, he says.
- Inventory is low: “Something like 50% of homes are currently either paid off or have a mortgage rate below 4% right now. People don’t want to sell and go into a 6% mortgage,” adds Lupo. That means no one is moving. Costs to build also remain really expensive, so few people are doing it.
Five Tips to Guide You Through the Rapids
1. Don’t be spooked, just figure it out
“If you’re sitting there waiting for the perfect market conditions, guess what. They do…