Wondering what’s ahead for real estate in 2023? While the market has been pretty unpredictable over the past few years, experts have some strong predictions for what we can expect in the months ahead. Here’s what to know.
1. Prices Will Begin to Level Out
In some much-needed good news for buyers, the National Association of Realtors predicts that housing prices will (finally) stop their constant surge in 2023. And while they’re not expected to drop, 0% growth in home prices is still a win for frustrated buyers who have been constantly finding themselves locked out of the market.
2. Inventory Will Stay Low
It appears that prices will rebound quicker than inventory. National Association of Home Builders’ vice president of forecasting and analysis Danushka Nanayakkara-Skillington says that the organization forecasts an ongoing lull in new housing starts, meaning an already sparse market will be further impacted by fewer new builds. It’s not all doom and gloom though, as the slump is expected to resolve itself when the economy rebounds in 2024.
3. Innovation Will Come to Mortgage Financing
Traditional real estate loans can be a headache for buyers. They can also be hard to come by. Luckily, Janneke Ratcliffe, vice president of the Housing Finance Policy Center at the Urban Institute told USA Today that she sees exciting things ahead in mortgage financing, including lots of innovation driven by start-ups, lenders, and policymakers, among others. And it’s possible this could translate into the land market as well, which is notoriously tricky when it comes to financing.
4. Buyers Will Regain Some Power
An end is coming to the seemingly endless sellers’ market. Matthew Speakman, a senior economist for Zillow, says that in 2023 he anticipates buyers regaining some of the power they lost in 2022 and 2021. This year, he adds, it will be the sellers who have to start adjusting their expectations a bit, meaning the return of contingencies, negotiations, and more appropriate pricing.
5. Virtual Property Shopping Will Stick Around
The pandemic caused a lot of quick shifts in how (and where) the property search takes place. And although many of those changes were a must for public health and safety, they were also smart conveniences that both buyers and sellers are reluctant to give up on – and for good reason. Expect to continue seeing things like more robust listings complete with drone footage and 3D tours in 2023, as well as the continuance of virtual property tours.
6. Millennials Will Dominate the Buyers’ Market
Despite all the think pieces on how Millennials are priced out of the housing market, research shows they’ll actually account for the majority of buyers in the new year thanks to things like stabilizing job security and a good understanding of the web-based search market. As for the top sellers? Unsurprisingly, that designation belongs to Boomers, with both older and younger Boomers expected to sell their properties at similar rates.
The real estate market has a way of surprising us, but these are six trends that you can safely assume will play out in the new year. Overall, there’s good news here for both buyers and sellers, particularly those who have been holding their breath and waiting for things to return to a more normal pace.
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