State of the WorcesterMulti market 9/28/2022
I have gotten a ton of calls in the last 2 weeks from owner occupant buyers and from investors as to the state of the Market for Multifamily.
Rates are going up.
Current Rates
Residential rates are at 7%
Commercial rates are at 6%
This takes a bite out of your buying power. A 1% rise in mortgage rates decreases your buying power by 11%.
Why Are Sellers Holding On?
But sellers are hanging on to their properties and most are not reducing prices.
They need to buy something else if they sell
There are not many good 1031 targets
They need to buy a home to live in and the change in interest rates make it not worth selling
What Are We Seeing?
Inventory is staying stable
It is the same houses on the market longer, and mostly junk
The good stuff still sells right away, e.g., 25 Fiske St, 220 Burncoat St
More houses are coming Back on Market (BOM) probably due to financing
Sellers are still holding on
What You Should Do
Keep looking
Offer prices you can afford on the houses you want
This is not a market to simply buy and hope the value goes up (like in 2020 and 2021). It is a market for educated, savvy buyers to make some good purchases.
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