The past few years have been especially interesting in the local and national real estate market. Recent events have left current property owners and investors curious about what the coming months could have in store for the Natick real estate market. If you’re interested in buying or selling a property, read on for everything you need to know about the short-term future of the Natick housing scene.
Housing market forecast 2022
Home values are decreasing
Property values in many communities are decreasing across the nation as the market rebalances. There are a number of factors contributing to the downturn in the market. Two of the most notable are high interest rates and rampant inflation. The current economic climate makes it difficult for many people to feel motivated to shop for a home unless it’s absolutely necessary.
The Natick real estate market, however, remains strong, with the median sold price currently sitting at over $800,000. This is a 21% increase over the year prior.
Interest rates are still rising
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It remains to be seen how long it may take for rates to come down. The Federal Reserve has indicated a desire to bring rates down, recognizing that such a move would create a more favorable real estate market climate for everyone involved. As of February 2023, the rate for a 30-year, fixed-rate conventional mortgage is around 6.5%, which is decreased slightly compared to the rates seen in October and November of 2022. While it’s true that rates have dropped a little, it remains to be seen when they may return to much lower levels.
The cost of rent will increase
With the housing market facing a unique set of challenges heading into the new year, it’s unlikely that rent will become any more affordable than it is right now. Tenants and landlords understand that many home seekers aren’t interested in shopping for properties at a higher interest rate and will price their rental properties accordingly.
How COVID-19 affected the Natick real estate market
In March and April of 2020, the Federal Reserve was scrambling for a response that would help keep the economy afloat. This is why they reduced interest rates to staggeringly low levels. Many prospective buyers took notice and capitalized on the ability to purchase a new home with a lower monthly payment. Sellers were able to charge a premium on their homes and often fielded multiple offers well above their asking price. Some homeowners chose not to sell but still refinanced their loans to lock in a payment with the lower rate. Times have changed, and rates that were recently close to two percent have now skyrocketed closer to seven percent. For the majority of the past ten years, interest rates hovered around four percent. With this in mind, it’s easy to see why the market is slowing down in many places.
Natick foreclosure statistics
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Massachusetts ranked 26th out of 50 states for foreclosures in January 2023. Foreclosures often correlate with state population, and a state that is more heavily or densely populated will usually rise to the top of the list simply based on averages. The fact that Massachusetts ranked behind several states with a lower population is a good reflection of the overall health of the market.
Natick median home prices
Homes in Natick are selling for an average price just above $800,000. They usually spend an average of 45 days on the market before selling. While the sales price has risen over the past year, many sellers are willing to negotiate, with 77% of Natick homes selling for less than the asking price.
Natick real estate market: Should you invest
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Some investors may wonder if it makes more sense to wait for interest rates to come down before they look to secure a property. This position may not benefit you as much as you think it might. There is a good chance that the market will respond quickly once interest rates begin to come down. Demand will likely increase, and home prices will begin to rise again, once rates are no longer higher than average. Choosing to buy a home right now gives you the opportunity to lock in a price and begin building equity sooner. If rates improve later on, you can always look into refinancing your loan and paying less in interest each month.
It’s easier to move forward when you have confidence about the overall condition of the housing market. There is evidence to suggest that the housing market remains in a strong position overall. Many experts will point to the mortgage delinquency rate as a reflection of the overall health of the market. While a higher mortgage delinquency rate would raise concern, the current numbers are as low as they have been at any point during the past 25 years. It’s also important to remember that homes are hard assets with tangible value that are less susceptible to changes and variances in the market.
As you can see, there are reasons to be optimistic about the future of the housing market. Time and time again, the economy has shown an ability to rebound and recover from past trends. If you choose to shop for a home in 2023, you can do so with confidence that you are making a sound investment.
No matter what the future holds for the Natick real estate market, you can count on the Barber Real Estate Group to help you with your transaction. Their talented agents immerse themselves in current market trends and developments on a daily basis. They work hard to make sure they are fully educated about everything that is taking place so that they can inform their clients about how to make the best possible decisions. Reach out to their team when you’re ready to move forward with your sale or purchase or if you have more questions about the current state of the market.
*Header photo courtesy of Shutterstock