RESIDENTIAL REAL ESTATE EXPERTS SHARE THEIR OPINIONS: PREDICTIONS FOR 2023 WEST COAST

“We are barely finished working on the 2nd week of 2023, and I already feel a shift in our residential market here in Los Angeles. Our luxury property transfer tax will increase significantly on April 1st this year. Sellers are seriously pricing their luxury homes to attract buyers who will close before the new tax enactment. I feel optimistic about this year’s market in LA because negotiations between seller and buyer are more balanced than in the previous two years. Serious sellers have priced their homes to sell quickly and are better tuned to the prevailing market price than ever before.”

- Ernie Carswell, Douglas Elliman Real Estate, Beverly Hills, CA

“For 2023, the San Diego market won’t be as steamy hot as it has been the past few years, but overall, the appeal to own a home in America’s Finest City still resonates for many buyers. Buyers in a position to buy should buy if they find the ideal property, and historically, real estate has been an asset class that appreciates long-term. With less competition and prices dipping, this may be an optimal time for buyers to take advantage of the market, especially as interest rates are projected to decline in 2023. We continue to see an influx of new residents from Northern California, Los Angeles, and cold weather states migrating to San Diego for its superb climate, lifestyle, tech-driven industries, and family-friendly communities.

A newly proposed mansion tax will go into effect in Los Angeles in April 2023, imposing a 4% tax on properties sold above $5 million and rising to 5.5% on properties above $10M. This could negatively impact the luxury market in LA and cause more buyers to move to San Diego.”

– Julie Han, Compass, San Diego, CA

“I’m cautiously optimistic about 2023, San Francisco is a world-class city that has always had an inventory challenge, and this year will be no different.

As we return to a more normalized market, we’ll see a slower start to the year, with sales picking up in Q2 and Q3. There are a lot of variables at play, rates, inflation and the economy, and we’ll see intelligent Buyers taking advantage of the opportunities and the ability to negotiate on price and terms, which we haven’t seen in years!”

– Colleen Cotter - Vanguard Properties, San Francisco, CA

Pacific Northwest

“Seattle and its surrounding suburbs of Bellevue, Kirkland and Medina, Washington are highly desirable places to live and are uniquely positioned geographically and are surrounded by water and mountains.

As spring approaches, we should begin to see more desirable homes come to market, but for now, there is a shortage of inventory. While our region is a center for technology, we are seeing more hybrid models of work-fromhome and less in-person office attendance becoming the norm. Washington State is also known for having “no-state income tax“, one of only a handful of states.

Our closest neighbor to the North, Vancouver, B.C., and Canada as a whole, has implemented a two-year ban on “foreign non-resident investment” in Canada, beginning this January of 2023.

As a result, we are already receiving inquiries from foreign buyers on ultra-high-end trophy listings. These foreign buyers would have otherwise elected to purchase a home near their friends and family who have already invested in Canadian real estate. They are now looking at a short drive (2 1/2 hours) and only a few hours south of our region.

I do believe this trend will trickle down to many of our high-end homes, newly constructed condominium towers, and certain highly desirable sectors of the single-family market, due to our close proximity to the border.

Additionally, Washington state is poised to receive continued attention from high-net-worth Californians hoping to escape weather-related issues, along with mounting local and state taxes and the new mansion tax in Los Angeles.”

- Moira Holley, Realogics Sotheby’s International Realty, Seattle, WA