The answer I will give you is a little different than what you will expect and is based on common sense. There are literally 10’s of thousands of blog posts and articles addressing this topic and all will vary in their response. You can easily consider these, together with the millions of Real Estate agents who are forced to become soothsayers and answer this question as well. The problem is that the question itself is inherently flawed because it fails to address the ultimate reality when it comes to Real Estate.
Real Estate isn’t a commodity. It is a necessity. We will consider this point strictly from a residential perspective and address Commercial properties in a separate entry.
That being said, whether you are buying for an investment or looking for a place to live, even if you are simply renting, everyone needs to have a place to live. Clothing, food, and shelter: those are the three necessities. Now we can easily argue that no one needs a designer outfit so that really wouldn’t fit into the category of a necessity. But most people would unequivocally say you need to wear some type of clothing if you are to survive in the blizzard we all just endured for “the Christmas that wasn’t” in Buffalo. Can we all agree, it would have been pretty tough to survive in a nudist camp anywhere in Erie County this winter? Put some clothes on, dude! Now, you could be one of the local eccentrics who insists on wearing shorts in the winter, here in the Queen’s City, but chances are most people would tell you that you are going out of your way to freeze your butt off by doing just that. But let’s get back to Real Estate.
So let’s ask the question again; should you buy in 2023? It simply depends on whether or not you need a place to live or have a critical need for a change of quarters to suit your current lifestyle. If you answered yes, then you have to deal with the reality of the market. It isn’t a “should you” or “should you not” question. It is, if you do decide, what should you expect. Prices are significantly higher than last year and chances are interest rates are higher too. So if you are looking to buy, you will pay more. That’s it. So you might be thinking that it would be better to wait. If this is the case, you are making your decision based on faulty logic. Perhaps you are thinking that prices are going to fall, if so, you need to ask what would make that happen? Like all products, regardless of whether they are necessities or commodities, the most important rule of economics always prevails. It all comes down to the law of supply and demand. Inventories are at record lows. This equates to low supply. There are more buyers than there are sellers out there, so why would prices come down? There are always exceptions to this rule, and there are certain pockets that skew the results, but the clear trend now is pretty much like it was last year. True we are seeing an easing in the frenzy and yes the number of multiple offers has lessened but we are still seeing lots of multiple offers. Something else we need to consider is inflation. You can choose to believe (as the current administration would have you believe) when they say it isn’t real or it is exaggerated, but if you do, you clearly haven’t gone to the supermarket and looked at the prices of one of the other necessities: food. Have you checked out the price of eggs? They have quadrupled in price in the last 8 months. Ok, you can choose to eat fewer eggs and buy something else, but if you want eggs, you will pay the price. If you want to change your residence, whether you are buying or renting, you are going to pay the price. One other thing to note about inflation. is something that any investment advisor will tell you is that in an inflationary economy the only protection you can gain is to invest in hard assets. There are two of these: precious metals and Real Estate. The problem with the first one is, it is a commodity not a necessity. Oh, and as you have probably deduced, you can’t live in gold bullion. On the other hand, people will always need a place to live. Speaking for myself, the last time we had a major inflation in the market, I had my share of Real Estate and I did very well. In fact, I paid more than I wanted to for one property, got a mortgage with negative amortization at 14.5% interest (not because I wanted to but because that was the market), AND I STILL MADE MONEY. Oddly enough, in terms of Real Estate, inflation was the best thing that ever happened to me. Like any good sailor, I prepared myself, did what I needed to do and I dealt with the weather.
Now here’s the good news, Real Estate agents are like really informed shoppers and they can manage to help you make smarter choices on not just what provides the best value for you right now, but they can probably show you dozens of different ways you can save money with creative financing strategies, help you access grants, and generally help you make the best choice you can while still working in the current market that might seem less affordable than you would like it to be. I have been telling people for years, a good Real Estate agent is worth their weight in gold. These days, they are worth their weight in Platinum. For 2023, The question shouldn’t be, should I buy or sell. It should be, who is the agent that is going to guide me through the tempestuous waters of the Real Estate market this year?
Author Brendan J. Cunningham is a New York Licensed Associate Real Estate Broker, lead of the Platinum Team at HusVar Real Estate, as well as an accomplished writer, Shakespearean trained professional actor, and podcaster.
Start your home search now at www.husvarre.com