ACRYSTALBALL FORTHE2023REAL ESTATEMARKET

WRITTENBY:PATRICIADINKENS,REALTOR PDINKENSRESIDENTIALPROPERTIESW/SAMSON PROPERTIES

After the past two and half years, many wonder what the real estate market will be like in 2023. Will 2023 be a good time to buy? If I put my house on the market, will it sell, and will I be able to find another property to purchase? Though the market can be compared to the ups and downs of the stock market, real estate is still one of the best investments a person can make.

Nationwide sales are predicted to drop, causing the number of houses on the market to remain low. This is due to many homeowners not selling the homes they bought during 2020 and 2021 when interest rates were low. On the National Association of Realtors (NAR) Newsroom webpage (December 2022), Lawrence Yun,

NAR Chief Economist and Senior Vice President of Research predicts that home sales will decline by 6.8% compared to the rates of 2022. According to Yun’s calculations, foreclosure rates will continue at historically low levels in 2023, making up less than 1% of all mortgages.

Maggie Davis, a writer for Lending Tree, states that a November 2022 survey conducted by Lending Tree revealed that 41% of more than 2000 people surveyed believe there will be a housing crash in 2023. Based on data from NAR in December 2022, the conditions are not favorable for a home price crash (see chart, next page).

We are currently seeing the market adjusting itself to what the industry calls normal. The market in 2020 and 2021 was not a typical market. Mark Fleming, Economist of First American Financial Corporation, predicts that once the market adjusts to the normalcy of higher interest rates, the housing market will benefit from continued strong, demographic-driven demand relative to an overall, long-term shortage of supply.

Virginia REALTORS Chief Economist, Ryan

Price, expects that sales activity will be slow in the coming months. His expectation of how the market moves in 2023 depend on several variables, such as inflation, the health of the job market, interest rate trends, and consumer confidence. Consistently there have been talks of a possible recession and its impact on the real estate market. During the last eight recessions, home prices have only depreciated twice. The overall forecast for Virginia as we enter 2023 appears to be a slow change, which is no different from the rest of the United States.

In conclusion, many variables are considered in forecasting the 2023 housing market. No one has a crystal ball. One thing that is known is that when buyers make a fair offer and sellers do not overprice their homes, the property will sell.

If you would like a free financial analysis of your home, my buyer’s guide or receive a monthly market report, send an email to patricia@patriciadinkens.realtor, with Crystal Ball 2023 in the subject line.