I always start my annual predictions report by quoting the great Yogi Berra, who said: “It’s tough to make predictions, especially about the future.”
And then, I proceed to step out on the ledge and make a sincere, if feeble attempt to do just that.
So, what can we expect in the coming year in the real estate market in our area? Stick around and I’ll share with you my iron clad predictions for 2023!
Let’s start with what we know:
We know home prices have, for the most part, leveled off (or are heading in that direction). Keep in mind that median prices naturally drop every fourth quarter, so for the fourth quarter of 2022 it was hard to tease out the seasonal affects from the other affects. More importantly, sellers seem to be accepting this new price reality, as we see sellers listing their homes at prices are more reasonable, compared to earlier in 2022.
We know that the mortgage interest rates that pushed many buyers to the sidelines, have been trending downward recently.
We know that much of what contributed to the market uncertainty, causing both buyers and sellers to take a wait-and-see position, thins such as inflation, gas prices, even the elections, are now slowly improving and are no longer weighing heavily on buyers’ minds.
And, the bottom line, we know that many of those buyers who pulled out of the market about six or nine months ago, have been returning to the market in the last month or two, lured back by the declining mortgage interest rate and the more realistic home prices.
Based on what we know, what do I expect to see in the coming year?
Inflation seems to continues to drop, which will cause mortgage interest rates to continue their downward trend. And the lower the mortgage interest rates, the more buyers will participate in the real estate market. Now, some of these buyers will be brand new to the market, while other will be buyers those who dropped out a few months ago, and are now returning to the market.
The net result will be an increase in overall consumer demand.
I also expect more sellers to enter the market, increasing both the quantity and quality of the housing inventory. The net result here will be an increase in overall market supply.
Now, while it’s hard to predict which of these two forces – supply and demand – will be more dominant, I do NOT expect that we’ll see the kind of market craziness that we’d seen during 2020 through the first quarter of 2022. I also expect that we will not see price drops! Rather I expect that we’ll see price stability, and even some modest home price appreciation.
So there you have it – my predictions for the 2023!
And what should you do with all these “iron-clad” predictions? I’m glad you asked…
If you’re a seller, then 2023 will be a good year for you! The buyers will be there waiting for you with open arms and reasonably open wallets. While you shouldn’t expect too many bidding wars, you also shouldn’t need to worry about your home sitting on the market for months, forcing you to continue dropping your price. Of course, this assumes, that you take all the necessary steps to get your home ready for the market, that you price correctly and market it correctly. If you need some specific advice on that, with absolute no obligation, just call me at the number below
If you’re a buyer, expect to see better inventory this year, but also some competition. To that end, make sure that you are ready, as if you are going into a tough sellers’ market, by educating yourself about the market in general, and about the home buying process in particular. This education piece is a critical step that we offer to all of our clients at no cost and with no obligation. Again, please call me at the number below.
And… make sure your loan financing is ready, including your lender’s underwriter approval, so you can compete effectively, even against cash buyers.
And if you’re looking to both buy and sell… well, 2023 is likely to be a good year for you too. But make sure to understand how to reduce your risk and minimize your exposure, by timing the buying and selling transaction correctly. Doing it wrong can cost you dearly and put you in some financial risk. I’ll be happy to explain your different options on that. Please feel free to call me at the number below, for a no-obligation consultation.
And finally, if you know anyone who is ready to sell and/or buy a home, please send them our way. Our 5-step selling system lays out the plan for selling fast and for the most amount of money. And our 3-step buying system for buyers helps you find the right home and secure it for the best deal possible.
And remember that a good portion of our income then goes to support the kids at Childhaven.
Happy 2023!