Five Factors to Consider Before Buying a Home in 2023

The market never stops because individual property owners have different circumstances.(Monkey Business Images/Shutterstock)

Dear Monty: We are baby boomers that are considering a lifestyle change. We have raised our family here and our children have their own families. We are not scared, but the turmoil we’ve observed during the past two or three years is unsettling. Conflicting views on the economy, interest rate fluctuations, home values and inflation make it difficult to commit to go ahead or stay put. Do you think 2023 will be a good time to make our move?

Monty’s Answer: The real estate marketplace always continues. While it slowed dramatically in the Great Depression of the late 1920s and early 1930s, homes continued to change hands. The market never stops because individual property owners have different circumstances. The major triggers for a home sale in any market are death, divorce and employment changes. The major effect in big downturns is that the market slows dramatically and home values drop.

Factors Influencing The Selling Decision

No. 1: Financial

Some people are well-positioned financially so that when selling their home, finances are not a primary consideration. Many potential home sellers are primarily motivated to sell their homes because they believe they can improve their status or finances by selling, or they sell because they can save carrying costs by downsizing. Unfortunately, some home sellers are forced to sell because of foreclosure, or they realize they are making payments on a home worth less than their mortgage.

No. 2: Sellers’ Market

The location of your home in the city your home is located. The best time to sell if one has a choice is in a hot sellers’ market. There are cities with hot markets, but only in certain price ranges. If your home is in a price range or sub-market within that city that presents a buyers’ market, there may be no advantage.

No. 3: Buyers’ Market

If you are moving to a different city, the market there may be different. The ideal situation is if one can sell in a sellers’ market and buy in a buyers’ submarket. These are often discretionary moves. In a discretionary move, timing and the right market data can protect your pocketbook.

No. 4: Your Lifestyle Choice

Lifestyle choices can open or limit housing opportunities. For example, buying a home to be constructed may give you time to coordinate the old home’s closing with the new home’s closing. Doing so reduces financial risk and may eliminate a “double move.” Another example is choosing the country life. There will be far fewer property choices, longer search periods, a high possibility of a double move and higher operating costs.

No. 5: Your Health

Some home sellers have a condition or conditions that require frequent doctor visits, or they have high risk conditions; they will seek a community with a top-tier medical facility.

This list is not a complete list. There are many additional reasons homeowners sell their homes. Passionate hobbies, close distance to family members, start a new life with a new love, and many more. Being fully informed will put you in a better position to make confident decisions when you understand the pros and the cons. While no one can really know what tomorrow will bring, investing time to investigate improves your odds of success.