The last three years have been a rollercoaster with the housing market going from hot to cold in what seems like the blink of an eye. So what does the housing market have in store for us in 2023?
This year, the most important factor to watch will be what happens in the broader economy. Will inflation continue? Will there be a recession or no? What’s ahead for the housing market in 2023? We spoke to Manuel Molinos, an expert real estate agent based in Ocala, Florida, for his predictions.
Mortgage rates may stabilize in 2023. Lower interest rates could lure buyers off the sidelines and prod owners into selling their homes.
Sellers will need to budge. Homebuyers will increasingly be in control and sellers will need to rethink their pricing strategies in the new year.
Home prices will continue to weaken. Forecasts are mixed, but overall prices are expected to stay at current levels, or even drop further.
Inventory will increase. To date, active list counts are all over the place. We see this as being a relatively fluid market where, as buyer activity picks up, there are quite a lot of homes that are ready to come on the market.
A sense of normalcy will return. According to Manuel, this is the year that regular, hardworking buyers will be able to get back in the game. Also, first-time homebuyers will be welcomed. This would be a major change from the past few years.
Buyers will be choosier. Over the past few years, buyers have been at the behest of sellers, squabbling over small amounts of inventory at record-high prices. This will go by the wayside in 2023, as quality begins to prevail.
Low mortgage interest rates will continue and the construction of single-family homes will increase by 5%, which has been ratified by the National Association of Home Builders.
Moreover, Manuel also expects the market to stabilize this year and give rise to a “healthy real estate market”, where healthy means “similar to the pre-covid era.” Also, property values will stabilize as the market gradually corrects itself.
“The market will continue to grow and expand, and the demand for housing in urban areas will increase. Millennials will continue to take over the market. We will also see more affordable housing options this year”, Manuel concludes.