Knowledge Is Power. How interest rates hikes are affecting our real estate market?

Knowledge Is Power. How interest rates hikes are affecting our real estate market?

  • Sandrine Deschaux
  • 11/17/22

We started 2022 with incredibly low interest rates under 3% which commanded record high sales prices throughout the first semester 2022. Properties were selling over asked 10-20%. As the Fed attempts to curb inflation by raising interest rates, the market started shifting in June with fears of a housing bubble and recession. Buyers express fears and affordability was impacted. Interest rates are now at their highest level for the past 14 years. About 20% of the transactions were cancelled in June. Properties started to sit longer on the market.

However, there are reasons to be hopeful for the future and 2023:

  • The housing inventory remains low. The market shows about 150 Active Real Estate listings in Somerville and Cambridge in November 2022. 
  • The mortgage industry is adapting offering new financing options (ARM, Buy points, etc)
  • The buyer demand remains high, and homeownership remains a Top goal for any individuals
  • The vacancy for rental properties is low commanding higher rental prices. Rental prices in our Cambridge area increases about 10% this year. Boston rents are second-highest in the nation.
  • Real Estate can be a hedge against inflation. Homeowners stand to gain over the long run. Those who buy and hold for at least 10 years have a 93% chance of selling their home for more than what they originally paid

A market correction is not the same as a crash. Our real estate market may experience a slight decrease in home prices as the market readjusts from recent rapid record highs.

If you are a homeowner, your home value is impacted with the new environment, and the Sandrine Deschaux + Co Group will be happy to walk you through the rationale of your current property value. The appreciation over the past 10 years has been exceptional even though recently curbed. As for your current property's worth.

If you are about to sell a home or will in 2023, selling strategy would need to incorporate creative financing solutions and expect longer days on the market. Note that the current market shift does not impact all segments of the market the same way. Pricing smartly will be key to your success when selling real estate.

If you are a current and future buyer, the market will open up and be more rationale, and you’ll be best served with an agent accustomed to negotiation. Conversations will revolve around financing and pricing. Today’s buyers should look at the upside to what the market means for their prospects.

We, with the Sandrine Deschaux + Co Group, aim at leading your way home smoothly and commanding the best results to our clients-sellers. We look forward to a conversation with you to assist with smart decision making and invite you to read our clients' reviews.

Sandrine Deschaux, RE/MAX Destiny Cambridge, Top Boston Producer, 2022, is an award-winning real estate agent, and can be reached at 857.204.9872 or


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