PREDICTIONS FOR 2023

This Is Not A Collapse

I’ve been through markets when housing collapsed, 2008 through 2010 and 1987 through 1989; horrible years in real estate. Prices collapsed, foreclosures and short sales everywhere, listings one year on the market and mortgage rates out of control reaching 18%. This downturn appears more like the 9/11 slowdown in 2001 where one event caused a stop in the market. From boom to an immediate bust but within two months, the market began to gradually improve and by six months, the market was normal. The difference for 2023 is that the normalization is taking longer.

Mortgage Rates Will Drop

Time will tell if the Feds made the right decision in how they addressed inflation, but their aggressive policy stance has certainly caused this housing downturn. The good news is that they are pulling back from future corrections and as such, interest rates are now dropping after rising to over 7% in October. Experts project that rates will remain around the 6% level for the first several months of 2023 and then dip down to the 5% range by year end 2023. Already the drop is creating more buyer activity. This will be the “new normal.” The other huge factor in this market is the builder buydowns, with some currently offering 4.9%. That is creating real buzz in certain new home areas.

Inventory Will Not Substantially Increase

Twenty years ago, the average North Texas family lived in their home only for four to six years. The American mindset has changed and now people live in their homes on average 13 years in the DFW area. Further, how many homeowners are even willing to give up their 3% mortgages? But there is always real estate activity with career changes, divorce, death, empty nester, growing family needs, job changes, etc.

A BALANCED MARKET - A RARITY IN THIS INDUSTRY

In 2023, it will not be a buyer’s market or a seller’s market. We have been in a seller’s market for almost three years and it was unlike any other in the last 50 years. Prices almost out of control, more buyers than sellers and a panic with buyers to find a nice home. Now we have moved into a somewhat balanced market. Home prices will remain strong but buyers will expect to negotiate and get concessions. Home values may drop 4%-6% in some markets but after such ridiculous increases, that can be expected. Instead of five days on the market we will have a more typical 30-60 days on the market.

Sellers Will Be More Realistic

The seller’s market boom days are over. Some of our sellers are still thinking the market is similar to one to two years ago – it is not. We are going through a market change and expectations shift. The listings that are staged and offer incentives should sell quickly.

Cynthia Fowler and RE/MAX DFW Associates are not in any way affiliated with The Homestead at Carrollton Owners Association, nor is this in any way an official advertisement or publication of The Homestead at Carrollton. ©2023 All rights reserved. This representation is based on sales and data reported by multiple brokers/agents to the NTREIS between May 16th, 2022 and February 9th, 2023. Listings and sales may not be those of RE/MAX DFW Associates. The NTREIS does not guarantee the accuracy of this data, which may not reflect all the real estate activity in the area. E&OE covered. This market report is not intended to solicit properties already listed for sale nor intended to cause a breach of an existing agency relationship.