Real Estate: 2023 Forecast
By JESS BARRON, Lindsey’s Inc. Realtors
You may have noticed that the real estate market has changed dramatically recently. We saw the strong seller’s market peak earlier in the year. Homes were selling at all-time high prices with record demand from buyers. We were regularly seeing multiple offers over list price with cash buyers typically winning these competitive bidding wars. I received 23 offers on one listing and 21 on another. This has all changed.
With mortgage rates up from three percent and four percent to seven and eight percent, the market has really changed. The number of homes available for sale, which was a huge problem earlier in the year, is slowly increasing but demand has cooled off. Many buyers have decided to wait to purchase until interest rates go down. These two developments, along with a historic inflation increase, have slowed down the real estate market considerably. Listings are taking much longer to sell, weeks and months instead of days. The number of showings has decreased considerably as there are just not as many buyers in the market. Now is a better time to buy than it was earlier in 2022.
We are seeing a buyer’s market take shape. While the real estate market is cooling, prices have decreased some but not significantly. They are still holding close to where they have been earlier in the year. I do see 2023 as a good time to be a buyer, as I expect prices and mortgage rates to decrease.
Lawrence Yun, the National Association of Realtors (NAR) chief economist, expects home sales to decline by seven percent in 2023, while the national median home price will increase by only one percent. In 2024, Yun projects a strong rebound for the housing market, with a 10 percent jump in home sales and a five percent increase in the national median home price. According to Yun, 2023 would be a better time to purchase a home than waiting to 2024.
If mortgage rates can drop from seven percent, that would be the optimal time to buy. According to the Mortgage Bankers Association (MBA), mortgage rates should be close to 5.4% by the end of 2023. If you are trying to “time your home purchase” this might be the time frame to aim for from what I am seeing and hearing in our marketplace.
Jess Barron is an Associate Broker with Lindseys, Inc. Realtors and former President of the Newnan-Coweta Board of Realtors.