Housing Market 2023 Insights

The talk of the time is the real estate housing market – why? Because of the crazy housing market trends that have occurred in the previous years. Some even say it is a direct result of the economy; the recession that is bound to happen. A great way to describe the current market is a statement from Rachel Cruze: “this is more of a housing market correction than a recession.” Housing market prices seem to be reverting to pre-pandemic levels, though there are plenty other trends that are specific to only 2023. Let’s get into it. 

Homeowners… if you are buying or selling a home in 2023, you may be experiencing some craziness. But not to worry, 2023’s market is not as crazy as it was in 2021. After the pandemic, the market was seeing over-the-top prices and receiving offers left and right. That isn’t really the case for what’s happening in 2023. 

What Is 2023 About?

As of April 2023, interest rates went back down 5-6%, and its predicted rates will stay within that range for the ongoing year. Though interest rates are a lot higher than they were in 2021, they have dropped enough for new buyers to return to the market in 2023 – and this drives an increase in demand. 

Demand in the housing market is extremely high, given the number of houses on the market are still low. Buyer demand will remain strong for the rest of 2023: Great news for sellers! 

The Seller’s Market

A seller’s market is when “demand for homes is higher than the supply of homes.” Sellers who are entering the market can expect to sell their home fairly quickly. Find a good agent and price it according to the market. 

Why Houses Are Selling So Fast

Long story short: there are more buyers than homes for sale. In March 2023, most homes stayed on the market for 18 days longer than March 2022, but that is still shorter than pre-pandemic times. For sellers wanting to sell quickly, this is your time to enter the market. For buyers, experts advise you to know exactly what you’re looking for in a home and establish a firm budget. Chances are, if you come into the market without knowing what you want and what you can afford, the house you’re set to close on could be taken from you. 

According to data from March 2023, the median home price saw an annual increase of 6.3%. So, half of all homes were listed for more than that, and half were listed for less.

Will Houses Be Cheaper to Buy in 2023?

Back to the basics of supply and demand – the high demand from buyers will prevent housing prices to drastically decrease. Data shows no signs of rapid increases either.

• Experts at the National Association of Realtors (NAR) predict a 0.3% increase in prices compared to 2022.

• While data from Freddie Mac and the National Association of Home Builders (NAHB) show an expected decrease of 0.2%, or as much as 15%. 

Will Housing Market Prices Drop in 2023?

There are a handful of factors that could cause home prices to drop, but it’s all in the demand of houses. If there were more homes for sale, buyers wouldn’t be in a strong demand, and it would realistically just help even out the market instead of a drastic drop in prices. Buyer demand could decrease from external factors, such as a rise in federal interest rates (similar to what we saw in 2022). This could cause buyers to pause on the house hunt to avoid higher rates. Simply put, prices are likely to stay relatively the same in 2023.

If you’re on the brink of selling, rest assured that the average house price in 2023 is still higher than previous years. Experts advise to sell now, rather than banking on your home to double in value, because the market can be unpredictable. Data shows the best time to sell is now. 

Foreclosures of 2023

We are going on 23 months of year-over-year increases in foreclosures, and its predicted activity will continue throughout the year. Many of the foreclosure activity, though, was just delayed because of the government moratorium on foreclosures during the time of the COVID-19 pandemic. 

• For homeowners: The market isn’t going to be overcome with foreclosures, meaning that your home will not plunge in value if there were a sudden increase in home inventory. 

• For home buyers: Experts advise not waiting to find a great deal on a foreclosure. This market is contrasted to the Great Recession and buying a foreclosed home could come with potential issues and conflicts. Again, make sure you are always prepared to buy a home, especially if you’re looking at one with foreclosure activity. 

What Does All Of This Mean For Realtors?

Business is always happening in the real estate, that is no doubt. This 2023 housing season is a booming time for both buyers and sellers (and inevitably realtors that are helping both parties through the process). Because buyer demand is at a high, agents can potentially assist many home buyers in finding the best possible house, even when inventory is limited. Realtors should be prepared to make home buyers confident in the process. For home buyers, houses are getting swept up quickly, so working with a realtor can ensure that they are receiving a house within the quickest time. For home sellers, a trusted agent can help you receive the best price possible and close the sale in a quicker time. 

Is Now The Time to Buy a House?

It could be a blessing to buy a home in 2023, but what really matters is if you can check these boxes off:

• You are debt-free.

• You have a down payment. A 20% down payment is ideal, but 5-10% is reasonable for first-time buyers. 

• You can pay the closing costs without needing money from your down payment.

• You have an emergency fund of 3-6 months of expenses. 

• Your monthly house payment is 25% less of your monthly take-home pay on a 15-year fixed-rate mortgage. 

Is your monthly house payment 25% less of your monthly take-home pay on a 15-year fixed-rate mortgage?

The most important takeaway is the market shouldn’t deter your buying decisions. As long as you are prepared to buy a home, it’s a good time to purchase, even with a high demand and limited inventory. Sellers should feel assured about selling their home in 2023 – there are strong buyers who are seeking homes and you’ll be able to capitalize on home prices, offers and determine the right buyer.