Is this year the right time to move?

The turn of the calendar may have come and gone, but it’s never too late to make New Year’s resolutions. Pledging to lose weight, get in shape, save more money and better enjoy life are all well and good. But perhaps this is the year when your best resolution could be to purchase a home.

“Year-ends and year beginnings are always a good time to evaluate housing situations because they often coincide with tax planning,” says Brandon Brown, a broker/ owner with BayBrook Realty in Laguna Beach, California. “There are many tax advantages of owning a home versus renting, and depending on your income and expected future income, a purchase often makes a lot of sense.”

Earlier in the year can also be a smart time to consider a home transaction because the market is typically slower until the spring buying season begins, which can happen as early as February but typically closer to April when the weather improves and shoppers get more serious about house hunting. A slower market with less competition can provide a considerable advantage to would-be purchasers, as sellers may be more willing to strike a deal at an agreeable price being that there are fewer buyer prospects.

And early 2023 could present a unique opportunity for buyers who were otherwise priced out of the market in past years.

“The end of 2022 saw the first decent decline in buyers’ demand in years. The reason behind this was higher interest rates, which caused buyers to lose a lot of buying power,” Brown says.

Higher interest rates have resulted in decreased interest in homes for sale and fewer listings as well. With less foot traffic and visitors to tour homes for sale, many sellers have been forced to lower prices and be more agreeable to concessions requested by buyers.

“As more millennials enter the market to buy a home, 2023 will be a good time to buy. Many buyers are sitting on the sidelines, waiting for rates and prices to drop. With buyer demand down, you will experience less competition, more inventory, and the ability to negotiate with the seller,” notes Colleen Cassel, a real estate agent with Compass in New York City.

On the other hand, the timing may not be favorable to claim or finance a home in 2023.

“It may make more sense to stay put and wait things out,” advises Rick Albert, a broker associate/Realtor with LAMERICA Real Estate in Los Angeles. “For example, let’s say you are in a three-bedroom home but really need a fourth bedroom. It would be cheaper to stay put and build an addition, convert a garage, or rework the floor plan to get your fourth room than it would be to move.”

Another argument for postponing a purchase this year is that home prices have a long way before they hit bottom. By being patient and waiting until later in the year or next year, you stand a better chance of possibly paying less for a home, although there’s always the risk that home prices as well as interest rates may rise.

“The best candidates for considering a move this year are those with cash in the bank. These people don’t have to rely on interest rates and the increased cost associated with higher interest rates,” Cassel points out. “Other people who should think about moving are those with urgency reasons, such as those experiencing a divorce or death in the family or those relocating for work purposes.”

Before committing to a move in 2023 or at any time, “do your research. Create a budget and understand your buying power,” advises Liz Hogan, a real estate agent with Compass in Miami. “Speak with a licensed real estate professional and lender to learn more about your market and purchasing options.”