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.

Residential rates are at 7%

Commercial rates are at 6%

This takes a bite out of your buying power.  a 1% rise in MTG rates decreases your buying power by 11%

But sellers are hanging on to their properties and most are not reducing prices.

WHY?

1. They need to buy something else if they sell and 

1a. There are not many good 1031 targets

1b. They need to buy a home to live in and the change in interest rates make it not worth selling

What are we seeing?

1. inventory is staying stable

1a. it is the same houses on the market longer, and mostly junk

2. The good stuff still sells right away eg. 25 Fiske st, 220 Burncoat St

3. More houses are coming Back on Market(BOM) probably due to financing

4. Sellers are still holding on

What you should do?

1. Keep looking

2. 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