By Janice Egan and Tim Beauvais
Micron Technology Inc. is coming to Central New York, with the construction of its $100 billion fabrication facility slated to start in 2024. This project will create 9,000 jobs over the next 20 years as well as four times that many in support positions at related suppliers and service companies.
Micron’s move to the Syracuse area will bring more people, which will have an effect on the real estate market. With more buyers, we very well may see home prices shoot back up.
Even though rates are high, it would be beneficial in the long-term to get your foot in the door early. A refinance when rates drop in the near future may benefit a buyer, rather than waiting for lower rates and increased home prices.
In March of 2020, when COVID froze the nation, one of the biggest concerns was the potential crash of the housing market. The initial lull in home sales at the very start of the pandemic quickly turned into a white hot sellers’ market with buyers offering over-asking price and even waiving home inspections.
This was attributed to interest rates hitting historic lows and the total number of buyers outweighing inventory to choose from. On average, there were eight offers on a home during this timeframe which typically resulted in the properties selling for much higher than the list price. The median value of properties located in Syracuse increased significantly.
Fast forward to the end of 2022 and we are beginning to see the market change.
The steep increase in interest rates over the 2022 calendar year has played a significant role in the real estate market. As of Nov. 2, the Federal Reserve has increased its federal funds rate by 3.75% in 2022 through numerous rate hikes. Although the Fed does not control mortgage interest rates, these hikes have resulted mortgage rates for a 30-year products to increase around 4% higher than in
‘Yes, interest rates rose to the highest percentage they’ve been at since the early 2005 in 2022, but they are not expected to stay at this level for an extended period of time.’
2021, the buyer of a median-priced home is facing a monthly principal and interest payment that is 66% higher. One factor contributing to the lack of inventory is the lower foreclosure rate. Currently, the amount of foreclosures is well below the historic average. With many economists predicting a recession in the 2023 calendar year this rate may rise.
Although there is still currently a low inventory of homes in Syracuse and its surrounding areas, the total is steadily starting to increase and it is safe to fully expect more homes on the market in 2023. More inventory means more options, which points to the potential of the market shifting towards the buyers.
Although 2020 through most of 2022 can be deemed a seller’s market, we’re starting to see a change that points to the buyers. Increased interest rates have put some buyers out of range from an affordability standpoint, and this is leading to less competition.
Yes, interest rates rose to the highest percentage they’ve been at since the early 2005 in 2022, but they are not expected to stay at this level for an extended period of time. An expected, a drop in inflation in 2023 will result in interest rates falling as well. Though we saw a significant increase in rates over the course of 2022, there is a light at the end of the tunnel. The market is always changing and these rates will be more affordable soon.
2023 will be a great time to buy. With expected increases in housing inventory along with projected dropping interest rates, it will be all about the buyers. If you are thinking about selling your home in 2023, the market will not be like it was, but the values of homes will not be like they were a couple of years ago. I think they may drop some. I do not think there will be multiple offers on a home like there was.