Real estate

Birmingham, Royal Oak, Ann Arbor and Grand Rapids are doing well in this area, he said.

Industrial

Szymczak ended his presentation with a note about industrial real estate.

He indicated that the industrial market is currently doing very well, but, according to his presentation slides, construction costs and energy costs are likely to stay at higher levels than pre2020.

Residential

Elsea began his presentation by discussing the market from the perspective of homeowners, compared to Realtors. He said that from the perspective of a homeowner, the market is doing fine. However, there is a little bit more worry among Realtors.

“We are coming off of insanity, and now it is more normal,” Elsea said. ”Whenever there is a change, it doesn’t matter what’s going on in terms of where it was and where it is, whenever you have an inflection point of change, that causes stress.”

Elsea said he does not think there is anything on the horizon right now that is going to cause a housing crash.

“The market we are going through now is 2008 without the foreclosures,” Elsea said.

Elsea suggested that, statistically speaking, this could be considered a real estate recession.

“We are coming from a crazy market to a slow market, and that percentage change probably does qualify, but it is still a good market,” Elsea said. “For that reason, there are not a lot of foreclosures, and what caused the value change and the crushing feel of 2008-2012 was foreclosures. … That is not going on now, and there is nothing in the foreseeable future to cause that.”

Elsea said that, in general, what we are going to see for the next few years is what we are seeing now, including tight inventory.

Since home affordability is at a 30-year low, the way to im- prove this is by adjusting one or all of the three legs of real estate: household income, home values and interest rates.

According to Elsea’s presentation, household income is rising, but is offset by inflation; home values are at all-time highs and are expected to drop in 2023 — however, low inventories should limit large price drops; interest rates are expected to fall in late 2023-2024.

“As much as the headlines are talking about horrible things, in general, it is a pretty healthy market. The values are not declining,” he said.

Elsea outlined market opportunities in 2023, including a growth in the value gap between move-in-ready and the rest of the market.

As for his 2023 expectations, he said there will be a 10%15% decrease in homes sold; home values will change between the range of a 3% increase to a 5% decrease; inventories will trend the same as in 2022 or lower, and interest rates will be in the mid 5s to low 6s.

To view the complete presentations of Elsea and Szymczak, visit bbcc.com/get-involved/past-events.