Is 2023 a good year to buy a house? Should you buy or wait until home prices drop? Read on for all the factors to consider when deciding whether you should purchase a house in Virginia Beach in 2023.
Even in desirable locations such as Virginia Beach, the 2023 housing market will continue to be stressful for those looking to purchase a house. People looking for their next home or real estate investment have been asking, “Should I even buy a house this year?”
If you’re doubtful about finding home-buying success in today's market, you’re not alone. In January 2022, a survey conducted by Fannie Mae found that buyers of all ages are becoming increasingly pessimistic about home-buying conditions. A recent survey showed that 82% of millennials who own a home have major regrets about their purchase.
If you want or need to buy a home in 2023, don’t let the competitive market fill you with dread. Read on to prepare yourself for success in today’s housing market and avoid buyer’s remorse.
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Is it a good time to buy a house in Virginia Beach?
Let’s be clear: 2023 is going to continue to be a strong seller’s market and a challenging year for buyers. The spike in demand over the past few years has led to a historically low housing supply. Buying a home this year will take patience and careful planning because so many buyers are after so few homes. The fact remains that many qualified buyers need housing this year. Unlike the 2008 crash, which was supported by artificial demand, we are now seeing the largest number of eligible home buyers in US history. High demand for homes will not disappear overnight (despite rising interest rates). Neither will ample available inventory suddenly appear.
So, now more than ever, having a trusted local expert like CGP Real Estate representing you when buying your first home in Virginia Beach is key. Real estate consultants will not only protect and guide you through the fast-paced decision-making process, but they can also ensure that you come out on top in a competitive market.
When will home prices go down?
Should you purchase a house now, or wait for an economic recession or a crash in the housing market? Our experts don’t forecast a housing market crash happening this year, and predictions suggest 2023 will remain a seller’s market with significant demand, low inventory, and prices correcting but not dropping significantly.
Mortgage rates, which have been at record lows for the past two years, have been on the rise. At some point, rates are likely to rise high enough to start pricing certain buyers out of the market, allowing for price growth and average market times for listings to slow down. However, it doesn’t look like home prices will crash in 2023.
What if I need to buy a house in 2023?
Though the market will remain competitive, there are many people for whom buying a house this year will be the best decision for them. In the renting vs. buying debate, purchasing property simply makes the most sense for their needs. However, homebuyers in Virginia Beach and across the country should be prepared for:
Fast Market Times:
For many months, we’ve seen the average new listing go under contract within a week of hitting the market. Though we anticipate 2023 homebuyers will have a sight reprieve from that pace, you should still be prepared to view a home as soon as you see it listed. Make sure your finances are in order so you can make an offer quickly. (And sign-up to receive timely alerts on new MLS listings so you don’t miss out!)
Multiple Offer Situations:
Until interest rates rise high enough to cool down competition, listings that are priced right and in good condition will continue to receive multiple competing offers - especially in early 2022, with homebuyers worried about being priced out of the market when mortgage rates do go up.
Get the best tips on how to win a house that has multiple offers on it here!
Compromising:
With supply still at a minimum, there simply aren’t that many options available to homebuyers right now (especially single-family homes). With less inventory, you may need to compromise on something - price, home size, location, features. Make a very clear list of negotiables vs. non-negotiables before you start looking.
Quick example of how limited supply is right now: As of February 21st, 2022, only 125 single-family homes were available on the MLS in all of Virginia Beach. They had an average price of $399,750. Pre-pandemic, the February 2019 market had 1,099.
Cash is King:
Cash will be necessary to secure a home in 2023. Sellers will often opt for a cash offer over those with financing to avoid risking a loan complicating the transaction. Be prepared to pay more out of pocket to cover an appraisal gap or increase your down payment to entice the seller to accept your offer.
To recap, if you feel you should buy a home in 2023, stay on top of new listings with MLS alerts, keep your expectations and demands realistic, and understand that being a buyer in a seller’s market may be hard work.
Anxious about buying a home? Don't let these common homebuying myths stop you.
How can I buy a home in 2023 to avoid buyer’s remorse?
We don’t want you to be like that 82% of Millennials, regretting something about their home purchase. At CGP, we’re all about homebuyers investing with confidence. So here are some tips we give our clients to prevent buyer’s remorse:
Be in the right headspace. Feeling rushed to buy anything is not fun - especially one of the biggest purchases of your life. However, you’ll have to act quickly. Understand that it may be difficult to secure your dream property. With a professional you can trust, ask all your questions about the process ahead of time, and be prepared to act when the perfect house comes up.
Work with a local expert. Working with a real estate professional who truly knows Virginia Beach (or whatever area you are moving to) is essential this year. They may have access to off-market deals. They know which houses are worth a higher price based on location and condition. They know which ones are not worth pursuing. Beware: Not all agents are created equally, or are equally concerned about potential buyer’s remorse. Work with someone who has your best interests in mind.
Make your wish list with current inventory in mind. To avoid regretting your home purchase, make sure you have a realistic idea of what homes are available when making your wish list. There simply may not be any 5-bedroom homes with a pool available in your price range in your ideal school district right now.
Draw red lines. Buying a home is an emotional process. Hard-and-fast guidelines for your search will help you avoid buyer’s remorse in two ways: you won’t waste time and risk temptation looking at houses you would regret purchasing, and you won’t fill your brain with luxurious homes you really can’t afford or wouldn’t suit you in the end. So many factors may seem negotiable in a fast market, but certain compromises often lead to regret. Here are some examples of “red lines” you can draw for yourself when determining if you should buy a house: - What is your absolute maximum monthly mortgage payment? - How much cash are you able to pay out of pocket? - Are there features you absolutely must have? (e.g. a second bathroom) - Do you need to be in a specific school district? - Can you and your family really live through a kitchen renovation? - Do you really want to commute 45+ minutes through the Hampton Roads Bridge Tunnel to work?
Patience is key. If your circumstances allow, have patience. It’s better to lose out on 5 properties and to get the 6th at a price and location that makes sense to you than to wake up 5 years from now regretting a bad financial decision you felt pressured into. Maybe your situation is more time-sensitive, and that’s ok. Pay extra attention to these steps to make the process work for you.
Don’t skip the home inspection. As tempting as it may be to sweeten your offer by skipping the home inspection, it can be a recipe for disaster. There are better ways to entice the seller without foregoing your due diligence.
Have your financing in order. Make sure you have a clear idea of what mortgage rate you can get and what type of financing will be available to you. Try to put 20% down on a home to avoid having to pay private mortgage insurance (PMI). Don’t forget to budget for home insurance and closing costs, too. You don’t want to be suffering from payments you can’t afford in the end.
Use a network of trusted contractors. Whether you are getting a property inspected or updating a sewage line before moving in, making sure you have access to some expert-recommended contractors is crucial. If you’re working with real estate experts like CGP, they can advise you toward the best electricians, carpenters, plumbers, and more.
Know when you can back out. Just because a seller accepts your offer doesn’t mean you can’t still terminate a contract if a major issue comes up. Talk to your trusted real estate professional to make sure you understand how the entire process works - including what contingencies are advisable for you - so you don’t get stuck with regrets.
Unsubscribe from new listings. You’ll want to be taking advantage of customized local MLS alerts of new listings while you’re searching, but once you’re closing on a house, make sure to unsubscribe. Staring at those carefully crafted photos of new homes on the market can easily cause “the grass is always greener” syndrome.
THE BOTTOM LINE
Buying a home in 2023 will be a challenge for many homebuyers, but with the right mindset and trusted professionals working with you, it doesn’t have to be so stressful.
If you’re wondering, “Should I buy a house in 2023 or should I wait?”—it really depends on your needs. Contact a real estate consultant at CGP today to talk through your options and help you answer this question.