Shifting market conditions does not spell Gloom and Doom for next year’s Buyers and Sellers.
The hectic real estate market conditions of the past two years has come to an end. Recent hikes in interest rates and stubborn inflation is the likely culprit. Some consumers fear a crash in the housing market similar to 2008, considering high housing prices and elevated interest rates. Real estate predictions for 2023 are not nearly as pessimistic.
(Thankfully, a stronger job market and improved procedures for loan applications will likely prevent a wave of mass foreclosures.)
Overall, real estate experts see 2023’s market correcting conditions for buyers and sellers.
You may have noticed that the market already started correcting itself…
The real estate roller coaster ride initiated by the Covid-19 pandemic started slowing down in mid to late 2022. Sales numbers for both new and existing homes declined as interest rate increased, shrinking purchasing powers of serious buyers.
A higher mortgage interest rate can impact a household’s monthly expense by hundreds of dollars. Buyers became cautious about offering to buy homes without home inspections and appraisals. Sellers had to adjust their expectations as wary buyers caused homes to sit on the market longer.
These correcting conditions are likely to continue through much of 2023. Homes may take a bit longer to sell than they have in recent years. Buyers are likely to add home inspection and financing contingencies to contracts as they reasonably want to protect their investment. Luckily, current equity held in today’s home mortgages combined with a stable job market should keep foreclosures in check.
Real Estate Predictions for 2023: Relief for Buyers may be on the horizon
Buyers have been through some volatile market conditions in the past two years. Most experienced writing multiple offers on homes that included escalation clauses to remain competitive in bidding wars. The low inventory had them feeling like their perfect, dream home was simply that–a dream. When interest rates increased dramatically, many had to modify their vision as they were priced out of desirable neighborhoods.
Thankfully, the interest rates that rose to their highest percentages in 15 years are expected to decline over the course of 2023. As interest rates find balance, the home prices that escalated over the past couple of years will continue to decline, albeit slowly.
The low inventory of homes on the market will help sellers continue to maximize the current higher value of their homes. Despite the drop in prices, it is unlikely to see pre-pandemic numbers simply from the lacking supply of homes on the market. This is good news for buyers and sellers alike. Prices will come down slightly for buyers, alleviating some of the concern around a high interest rate. Sellers will still be able to maximize the current elevated price of their home and cash in on some well deserved equity.
Curious to what’s currently available through Fawn Lake Real Estate Company? Search available inventory here!
We are remaining cautiously optimistic for this year’s real estate market.
The good news is that the housing market situation is not nearly as dire as some believe. The majority of homes will maintain their value, especially those that are well cared for and properly maintained. Buyers will be able to find their perfect home for a competitive price while protecting their investment with inspections and appraisals. Sellers can achieve their goals of closing on the sale of their home for the best price possible.
It’s important to remember that there will always be someone who needs to sell their home. Likewise, there will always be someone who needs to move or buy a new home. The key to a successful transaction, in any market, is working with an experienced and credible agent who can provide the advice and resources buyers and sellers need to happily move on to their next chapter.