Why Early 2023 is the Time to Buy

Christian: [0:00] Hello, hello, and welcome to another episode of the Awesome in Seattle podcast. This is your host, Christian Awesome, of the Awesome Awesome Group at Wilson Realty Exchange, Inc. And yes, that is a mouthful to say every single week. But it's okay. This podcast today is one that I think is super, super timely. It is really about buying over the next few months here in early 2023. And it's really, we're starting to see a great opportunity for buyers, and that's kind of why we're talking about this right now. Um, it is a great time for buyers, and I don't think we have a huge window of opportunity while this is gonna last, because the media's gonna pick up on this based on all of us agents who are seeing this firsthand on the ground in the trenches, and the media's finally, I hope, gonna start to catch on and start reporting the actual news that's going on in the trenches. So this week's episode is really why early 2023 is a great time to buy. So before we get into this, let me introduce my co-hosts, the one, the only, Joanna Beecher.

Speaker 2: [1:01] Hello.

Christian: [1:01] And Reed Watson.

Speaker 2: [1:02] Hello.

Christian: [1:04] All right. So I'm sure you've all heard that the real estate market went through quite a bit of a shift really the second half of 2022. Don't know that, definitely l- listen to episode 89, which is 2022 year in review that we did. That'll explain everything that happened Our current market is still very buyer-friendly for right now. Uh, but that window, we feel, is really starting to turn, and it's going to turn eventually probably before June, most likely within two to three months at the most. Uh, and it's really the end of January right now, so we don't have a lot of time until this window kind of closes on us. And so that's really why we wanted to make this episode today. So Reed, let's start to go into why early 2023 is probably a buyer's best shot over the next few years to get a great deal.

Reed: [1:56] Absolutely, Christian. So the current market allows buyers to have much better terms than we've seen in years in Seattle, and right now we're seeing a lot of buyers getting credits from sellers, credits basically being a little bit of money back to go into the transaction. And some buyers use that to buy down their interest rate. If you haven't heard of a 2-1 buydown, it's covered very thoroughly in episode 83 with mortgage expert Dan Keller. But essentially a 2-1 buydown is where you use that credit to buy down your mortgage rate for the first two years of homeownership. Buyers can actually have inspections now, and when things are wrong with the house, they can ask the seller to fix them or, again, ask for a credit, and they can have a lot more provisions in their contract that are just buyer-friendly, that protect the buyer, both in terms of the quality of the house and your finances. A lot of really good options there. There are also deals. We have seen a ton of fantastic deals on really solid homes that have come on the market because things just aren't selling as fast as they were when some sellers were… As they were, and some sellers Because things just aren't selling as fast as they were, and some sellers are willing to give a discount on that purchase price in order to get the property sold in a timely manner. Let's also mention inflation. Don't just keep that cash in your pocket, uh, when you can buy an asset that really appreciates over time. So your cash is essentially losing value during inflationary times if it just sits in your bank account. You also don't need 20% down to buy, and it's, that's just a huge myth in real estate. So most Seattle buyers only put 5% down, and I think buying may b- be more in reach than a lot of people think right now, especially younger people. So saving for a year or two to have a bigger down payment doesn't actually make sense for a lot of people at the end of the day, even though they think that they need to do that.

Christian: [3:53] Yeah, so real estate is a fantastic hedge against inflation, and if your money is sitting in a bank account, you're literally losing money every single month. So, um, we did a complete rundown about this on episode 81, Making Sense of the Market. Definitely listen to that if you wanna learn more about that topic.

Reed: [4:09] Absolutely. And just to sort of wrap up my spiel as to why 2023 is a great time to buy, we also anticipate that when rates go down, they're already trending that way right now, and we think we're gonna see a big influx of buyers into the market when they go back down. And the small number of inventory for sale, so property for sale, therefore will create a huge amount of demand, and we're gonna be back in a competitive market in no time. So if you're thinking of buying in the next few years, you have a short window over the next few months where conditions could be really great for you.

Christian: [4:42] Yeah, and I, we're already starting to see, even in these first, you know, 25 days of January, um, we're already starting to see multiple offers again. Um, they're not like 20 offers and going for 100,000 over the asking price. It's more like, you know, three, four, five offers and going for slightly above, uh, or maybe you just don't get to include, um, all of the contingencies that we kinda talked about. So, um, it is starting already. We're already starting to see this with rates predicted to go down and- Inventory continuing to be very low, that's the projection. When rates do go down, we're expecting to see a more competitive market here in the Seattle area. Aside from our current market, there are a lot of tried and true reasons why one should consider buying, uh, instead of renting. And Joanna, let's tell some people why, or everyone, not just some of the people that are listening. Mm-hmm. We're gonna mute it for some of them if you're special. For others, you get to hear. So see if you get to hear. All right, let's go over why renting doesn't always make sense. It does for some people, but not every time. Yeah. So let's go over some of those reasons.

Speaker 2: [5:50] I will gladly tell that to all people. We have the same conversation a lot with potential home buyers, that renting can become very comfortable, especially if you have a place and a location that you really like. There are so many reasons- Is the

Christian: [6:03] sound audio good enough, Hailey? Yeah. She's kind of far for sound, so I was-

Speaker 2: [6:06] Oh, am I too far? No, you're good. Okay. Okay. Um, if you have a place and location you like, but there are so many reasons that buying a home makes sense. Um, I'm going to touch on some of those right now. Tax benefits. That's the big one. Let's tackle the money first, okay? Yeah. Sure, it seems like it costs more to own a home, but the government actually encourages home ownership, and we cover this whole subject in detail on episode 58 of the Awesome in Seattle podcast. So I encourage you to check that out if you wanna hear more details about our lovely tax code. Number two is appreciation and wealth building. Again, more financial benefits, and these are at the top of everyone's list. I'm sure most renters have heard what I'm about to say, but that's because it's true. If you're going to pay to have a roof over your head, you might as well get the added bonus of the property being worth more over the years. Real estate is a great wealth builder. Um, number three is you get to make it your own. If you've had a landlord gracious enough to let you paint the walls in your rental home, you're lucky. Many tenants can't even do the slightest upgrades to their home, let alone taking out a wall to open up the space in a room, or renovating a bathroom or a kitchen. I've done these things, and like I was just saying to my lovely co-host here, it's really hard to dial that back- Mm-hmm … when, uh, you have to leave. So-

Christian: [7:30] Yeah … Speaker 2: I don't recommend. Number four, your monthly payments can't increase. If you're on a fixed rate in a 15 or 30-year mortgage, the amount you pay each month is calculated from the very beginning and will remain the same as long as you own the home. If you are renting, you never know what your rent will increase to if the next year, or if your landlord will decide to sell the property. Mm-hmm.

Speaker 2: [7:54] That's a lot of uncertainty. Or if they're gonna tear the house down.

Christian: [7:56] Yeah. The only thing I would add as a caveat there is that you could have, and probably will have, your property taxes adjust either up or down, and you could have your homeowner's insurance adjust up or down slightly, but they are not massive jumps like a rent increase would be each year.

Speaker 2: [8:13] Right. Right.

Christian: [8:14] Pretty minimal.

Speaker 2: [8:15] Exactly. Number five is it's an opportunity to build your com- But when you put down roots as a homeowner, you'll probably feel greater sense of belonging and a stronger motivation to build your community own a property, local amenities like schools, parks, libraries, shops, restaurants, and corner shops just, they just matter more. And my dearest to my heart, number six. You can have all the pets. All of them that you want when you own your own home. Finding a rental that accepts pets, and especially, you know, when it comes to breeds, certain breeds of dogs, um, or even certain types of pets, uh, that's really difficult in the rental space. Um, you can find some really cool landlords, but they're so rare. And when you own your house, obviously you know you can have free rein. Obviously, condos can be a little bit trickier with HOAs, but town homes and single family homes are definitely, you know, gonna be more-

Christian: [9:12] Lenient … Speaker 2: lenient. Yes. Thank you. And the greatest part about a single family home is that you can usually probably find one with a good amount of yard, which is great. Mm-hmm. Town homes you can usually have a little space as well. Mm-hmm. Big enough. And then if you have a condo, you can have your… Usually a lot of condos have some patio or deck space, so. Yep.

Speaker 2: [9:33] That's also fun.

Christian: [9:35] Yeah. I, I think that really covers why buying over renting kinda makes sense for a lot of people, and I think it also really helps to cover why we have such a small opportunity, in our opinion, over the next couple months, maybe as much as the first half of 2023, for buyers to actually get deals. I don't see this lasting forever. Um, we talked about, we don't generally like to really kinda sell, I'm using air quotes here, too hard, and try and push people to do things sooner than later. We are very laid back. Listen to every podcast episode, you'll see that. That said, we do see an opportunity, and we kinda fought back and forth whether or not we wanted to record this podcast, because we don't like to push and sell. But we also felt, at least I felt very strongly, that we needed to get this message out, because we do see an opportunity, and I don't think it's gonna last for long. So really, if you are on the fence whether or not buying makes sense right now, chat with us, let's do a strategy session. You make the decision. We're not gonna push you to do something, but at least you have the knowledge after listening to this episode on if it does make sense for you or not, especially after we have a strategy session. Again, if you wanna do that, go to AwesomeNossumGroup.com/schedule. You can schedule a time to have a talk with us, either in person or via Zoom. Um, they're zero pressure, they're totally free. Also, if you are thinking about buying- And you're not quite sure you wanna jump straight into talking with us one-on-one, you can always come to one of our Beers and Home Buying classes. We have them every single month. Some months we have multiple. Go to beersandhomebuying.com (opens in a new tab). You'll see all of our upcoming classes, and you can sign up. They're totally free. It's only an hour long. We stick around and do some Q&A sometimes for 15, 20, 30 minutes, depending on how many good questions we have, but the actual content is only an hour long. It is not a timeshare spiel. It's super laid back and fun, and you get free beer. So, uh, we host them all around the city at different bars, restaurants, breweries, and they're super fun. So that's an easy way for you to get some basic knowledge on how the process works, what's going on in the market, and kind of answer some of the basic questions you're wondering, which is, "Should I buy? Should I keep renting? What makes sense for me?" That's it for this episode. Thank you so much for listening to the Awesome in Seattle podcast. Until next time, see ya.