As of November 2, 2022, interest rates are now twice as much as they were this same time last year. The impact on the market has yet to be fully realized. As someone who has bought and sold during downturns, and normal markets, and sees a seller’s market and a buyer’s market happening simultaneously in the same zip code, my instinct is that the building blocks for equity are both sales price and length of time ownership. In other words, in most areas, the time spent owning a property will have the greatest impact on equity. No matter the rates or supply and demand dynamics, one fundamental piece of advice I will always give to my clients is to own your home for at least 5 years. 7 is even better. 10 is great.
Economists typically track longer windows of activity. In Real Estate, we sometimes see the market change weekend by weekend. In 2019, for example, in Fairfax County VA, the market came to a halt over Mother’s Day weekend. Listings sat a couple of extra weeks than had been typical. The week before Labor Day in 2022 yielded very little activity for my townhouse listing in Leesburg, VA. However, by Sunday of Labor Day weekend, we had received three offers. When you go to sell, you do not want to have your ROI hinging on such tight timeframes or a rainy weekend. The longer you own a home, the less important these small blips in the market will impact your proceeds.
