Interest rates continue to rise and as they do buyers begin to fall out of the market. This ultimately reduces demand for housing and as such housing prices and sales are softening. Prices haven't started to collapse or for that matter even drop much. But inventory levels are steadily increasing and at some point in the not too distant future we will transition out of the "sellers" market and into a "buyers" market.
Federal government spending and runaway inflation will not go away anytime soon so it stands to reason that rate hikes will continue. Governments tend to overcorrect and I see that happening yet again, right now. We need to prepare for rates that exceed the 50 year average.
The biggest issue is that housing has been artificially boosted by low interest rates largely 'funded' by federal mortgage backing. We have now removed the artificial 'bonus' of federal backing of mortgages. Now we are settling into a more 'normal' mortgage market. This however has eliminated the ability of thousands of people to buy a house. As rates rise and buyers disappear it is inevitable that prices will suffer.
I have tweaked my bubbly and enthusiastic outlook for 2023 to a more cautiously optimistic approach. I see a general downturn in pricing and a buyers market by Q2 2023 at least locally. As for a crash, I do not see that yet. Banks have been making better quality loans over the last decade and can't see the kind of nightmare we saw in 2009-2011. That said sellers sitting on a pile of equity should consider selling SOONER rather than later if a move is in the near future.
So take a look at your near term future say the next 3 years, if a move is in that picture, now may be the time.
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