In November, our team started a monthly survey plan that we will use to report back on the local sentiment around our real estate market. Every month or so, we will be asking a set of our friends and clients for their input with 2-3 survey questions. You can find the results of our first survey below, along with our comments and predictions about interest rates and home values.
Question 1 – Do you think the average sale price will be higher, the same or lower next year compared to now?
52% of people thought prices would be the same or higher, while 48% thought they would be lower. This matches very close to a national survey reporting 51% thought the housing market would “remain strong over the next year.”
Our thoughts: We have been predicting a period of flat housing prices as the changes in interest rates are digested by the market and home buyers. Somewhat surprising, the month-to-month average sale prices continue a trend upward in Champaign county through the fall and winter. This is a very good sign for our local housing market.
Question 2 – Do you think interest rates will be higher, the same or lower in a year compared to now?
62% of respondents thought interest rates would be higher in a year compared to November 2023. For future reference, the average 30-year interest rate l was roughly 6.75%. Only 16.5% thought interest rates would be lower. With all the press given to the Fed’s actions around interest rates, it is not surprising people expect them to go higher.
Our thoughts: We expect interest rates to be roughly the same (6.75-7%) in November 2023. However, we think they will continually bounce around and float between 6-8% over the next year, giving a lot of opportunity for home buyers to lock in rates.
