The real estate market in 2023 is expected to experience a mix of trends and fluctuations. According to the California Association of Realtors (CAR), existing single-family home sales are predicted to drop by 7.2% in 2023. Pulsenomics founder Terry Loebs also stated that the majority of experts predict a decline in U.S. home prices in 2023. However, home prices could bounce back at an average rate of 3.5% per year from 2024 to 2027.
Predictions
Zillow projects a modest 0.5% rise in typical U.S. home values from January 2023 to January 2024 (seasonally adjusted). Despite the potential drop in home prices, 44% of economists and housing experts believe that the housing market will shift positively by the end of 2023. This shift, along with the possibility of reduced mortgage rates, could provide more opportunities for investment in real estate, whether for flipping or renting.
In 2023, the national annual median price for homes for sale is projected to rise by another 5.4%, which is less than half the pace seen in 2022. The housing market is expected to remain subdued, with home sales staying slow but seeing a slight increase compared to previous estimates. Low inventory levels are likely to continue throughout 2023, according to Rick Sharga, executive vice president of market intelligence at ATTOM Data.
What To Watch
Some key themes emerging in the real estate market for 2023 include workforce transformation, sustainability and climate change, deals and capital markets, and migration to affordable housing. The housing supply is expected to remain limited, with tight inventory issues keeping prices from dropping off significantly. This situation is perpetuating affordability challenges for many, especially first-time homebuyers.
Foreclosures are expected to remain below pre-pandemic levels, despite the steady rise in foreclosures after the expiration of the Covid-19 foreclosure moratorium in September 2021. In 2022, foreclosures were down 34% compared to 2019, according to ATTOM Data’s Year-End 2022 U.S. Foreclosure Market Report.
Whats it mean?
Overall, the real estate market in 2023 is expected to experience a mix of growth and decline, with regional variations in home prices and sales. While some areas may see price increases, others may experience dips. The housing market is more likely to correct itself from the double-digit percentage jumps seen in home prices in recent years rather than crash. Buyers and investors should carefully consider their financial position and local market conditions before making any decisions in the 2023 real estate market.
Citations :
- https://www.noradarealestate.com/blog/real-estate-investing-for-beginners/#:~:text=2023 is a balanced year,homebuyers and lowers property values.
- https://www.noradarealestate.com/blog/housing-prices/
- https://www.forbes.com/sites/forbesbusinesscouncil/2023/02/06/three-predictions-for-fix-and-flip-real-estate-investments-in-2023/#:~:text=While we saw mortgage rates,whether for flipping or renting.
- https://www.pwc.com/us/en/industries/financial-services/asset-wealth-management/real-estate/emerging-trends-in-real-estate.html
- https://managecasa.com/articles/california-housing-market-report/
- https://www.bankrate.com/real-estate/housing-market-predictions-2023/
- https://www.foxbusiness.com/personal-finance/home-prices-drop-2023-zillow
- https://www.usatoday.com/story/money/personalfinance/real-estate/2022/12/15/housing-market-six-experts-2023-real-estate-industry/10881757002/
- https://www.forbes.com/advisor/mortgages/real-estate/housing-market-predictions/
- https://www.foxbusiness.com/personal-finance/home-prices-drop-2023-zillow#:~:text=“The majority of experts are,year from 2024 to 2027.
- https://www.noradarealestate.com/blog/housing-prices/#:~:text=In its most recent prediction,increase compared to previous estimates.
- https://www.noradarealestate.com/blog/housing-prices/#:~:text=In 2023%2C the national annual,lot of equity in it.
