As we head into 2023, there are several key predictions for the real estate market that are worth considering. These predictions come from Matthew Gardner, an economist with Windermere Real Estate, and are based on a variety of factors including economic trends, demographic shifts, and changing consumer preferences.
Here are the top ten predictions for the real estate market going into 2023:
- Prices will continue to rise. This trend has been seen in many markets over the past year, and is expected to continue as demand for housing outstrips supply in many areas.
- The spring market will be busier than expected. With more buyers looking to enter the market and take advantage of low mortgage rates, the spring selling season is expected to be particularly active this year.
- The rise of the suburbs. Many buyers, particularly those with families, are looking to leave the crowded cities and move to the suburbs, where they can find more space, better schools, and a higher quality of life. This trend has led to a surge in new construction in the suburbs, as builders try to meet the demand for larger homes.
- Zoning issues will be addressed. As cities try to meet the demand for housing, they are starting to relax zoning regulations, allowing for more multi-family units and smaller lot sizes. This trend is expected to continue as the need for more affordable housing grows.
- Climate change will impact where buyers live. While it is controversial whether or not climate change is driving people’s decisions about where to live, it is undeniable that natural disasters such as floods and wildfires can have a significant impact on the real estate market. Some buyers may choose to avoid areas that are prone to these types of events, while others may be attracted to areas that have a lower risk of natural disasters.
- Urban markets will bounce back. After seeing a slowdown in activity over the past year, many urban markets are expected to bounce back in 2023 as buyers return to the cities.
- A resurgence of foreign investors. The US real estate market has long been attractive to foreign investors, and this trend is expected to continue as the strength of the US economy and the stability of its real estate market continue to be major draws for foreign buyers.
- First-time buyers will be an even bigger factor. With 4.8 million millennials turning 30 this year, it is expected that this age group will be an even bigger factor in the real estate market in 2023. Many of these buyers will be looking to purchase their first home, which could drive demand in the market.
- Interest rates will remain low. With the Federal Reserve signaling that it will keep interest rates low for the foreseeable future, it is expected that mortgage rates will remain at historically low levels, which could help to boost demand for housing.
- Forbearance programs will come to an end. Many homeowners who were facing financial challenges due to the COVID-19 pandemic were able to take advantage of forbearance programs, which allowed them to postpone their mortgage payments. These programs are expected to come to an end in 2023, which could lead to some challenges for homeowners who are unable to catch up on their payments.
Overall, these predictions point to a real estate market that is expected to be active and dynamic in 2023, with rising prices, a surge in demand, and a number of other key trends worth watching. Whether you are a buyer or a seller, it is important to stay up to date on these trends so that you can make the best decisions for your own real estate needs.
Here’s the link to Matthew Gardner’s video of his top 10 predictions for 2023: