2023 Summer Real Estate Trends – What to Expect
Over the course of the last few years the housing market has been a roller coaster. We’ve seen the cost-of-living reach unprecedented highs and only recently begin to fall again. And even as the price of housing seems to decline very slowly, the market does not resemble anything close to what it was in early 2020. So, if the market has been slow-moving and extreme thus far, what real estate trends can we expect in 2023?
Low Supply, High Demand
Demand for housing has been inflated since 2008 and this is not expected to change in 2023. Short supply of new homes coupled with such massive demand has economists confident that high home prices will sustain. Why no inventory? According to businesswire.com, roughly 85% of current homeowners have an interest rate lower than the average 6+% today. When you consider this statistic, current homeowner’s have little incentive to sell. Furthermore, building a new home from scratch is expensive. On average, new construction costs $34,000 more than buying an already existing home, when it’s all said and done.
As of Q4 in 2022, foreclosures were down 34% in the U.S. compared to 2019. This is in large part due to the fact that despite homeowners still struggling to get ahead on their payments, property values across the country have seen a spike. Ultimately this gives homeowners more flexibility to sell their home before they take a loss, or refinance at a better rate- something that was unimaginable during the 2008 housing crisis.
While it’s true that the housing market is facing some challenges in 2023, there are also reasons for optimism. With demand for housing remaining high, homeowners can feel confident that their investment will hold its value. And while new construction costs may be high, this also presents an opportunity for homeowners to invest in renovations and upgrades that can increase the value of their homes. Additionally, with foreclosures down, more people are able to stay in their homes and take advantage of rising property values. By working with a knowledgeable real estate professional and staying informed about market trends, buyers and sellers alike can feel empowered to make smart decisions and take advantage of the opportunities available in the current housing market.