A Forecast for 2023
Amid higher mortgage rates and inflation, many buyers are presenting lowball offers, assuming that sellers are no longer in control. The buyers reason that the days of sellers asking for whatever they want, and having bidding wars for their properties is over, and so the sellers should be receptive to lower offers. This is partially true, but not entirely. Here are 2 reasons why:
First, this year I’ve had more people paying cash for their second homes here in Breckenridge and surrounding areas. Remember, Breckenridge is a resort market, so interest rates are not as much of a concern here, versus areas where people are struggling to finance their first home purchase. But, the way that it is affecting our investors in Breckenridge, is that they are now figuring “cash is king” and in some cases they are right. A cash transaction can close quickly, around 3 weeks, while a transaction with a loan will typically take 6-8 weeks. A quick closing is usually appealing to a seller.
Second, sellers are seeing more price reductions in their properties for sale and so they see this as a distressed or highly motivated seller. From what we are seeing these price reductions are due to the sellers learning that the crazy run on sales that we saw during the pandemic, where the sellers can demand whatever price they want and get multiple bids, is no longer the case. It takes awhile for both buyers and sellers to learn that this market is different, and more balanced for buyers and sellers. It is a more equal playing field you might say. So in this learning process, you will see price reductions periodically until the market will bear the sellers’ price. The market dictates the price always.
In an ever-changing world our Breckenridge market is no different so keeping educated is the best way to make a good decision. We are always here to discuss what the latest projections are during a specific season. We are your local experts!