05/12/2023
LUXURY OUTLOOK REPORT | Amid increasing interest rates and uncertain economic conditions, we’re seeing moderate increases in home inventory, and buyers may find the balance of power shifting slightly in their favor.
Buyers—finally—are breathing a sigh of relief.
“Even though inventory has increased, buyers aren’t quite yet in the driver’s seat,” says Shelton Wilder, sales associate of Sotheby’s International Realty–Brentwood Brokerage. That said, “there is a slight change in negotiating power and keeping contingencies in place.”
“We don’t anticipate a large increase because many homeowners won’t want to give up their low-interest rate from refinancing or purchasing over the last two years,” Lawrence Yun, chief economist for the National Association of Realtors, says. “We may see some moderate increases, but not anything drastic.”
Jim Egan, Morgan Stanley’s U.S. housing strategist, told Bloomberg’s Odd Lots podcast that inventory is one of the most critical statistics to gauge the market's health. “There are three angles we look at: new inventory, existing inventory, and shadow inventory/distressed,” he told the podcast. “The third is what you need for downward momentum in year-over-year prices; we don’t see that happening.”
“With the economy the way it is, I believe buyers are cautious, but, at the same time, with such little supply, we are seeing sales of properly priced homes still moving at a rapid pace,” says William Montero, global real estate advisor, Gibson Sotheby’s International Realty in Massachusetts.
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