Several experts expected the real estate market to slow down due to inflated home prices and high-interest rates lately. This is because prospective homebuyers find it difficult to afford an inflated home, let alone the associated interest rates. However, this is a slowdown as many experts predict that the market will cool off shortly due to various factors.
2023 is proving to be a hectic year for the real estate industry. With the world’s population continuing to rise, it has been a long wait for many potential homebuyers to enter the market when housing prices drop. This has led to several changes in the real estate sector, and these changes are only expected to extend over the next few years.
Here are the things you should expect from real estate in 2023:
Existing Home Sales Have Fallen
Have you ever wondered why some buyers wait for the perfect time to purchase a new home? One of the reasons is that existing home sales have been declining in recent years. This means that the number of homes sold is decreasing, making it difficult for potential buyers to purchase a home.
For instance, in 2020, existing home sales dropped by 8.5% compared to 2019 because of the coronavirus pandemic. Experts predict the decline in existing home sales will continue into 2023, with a further decrease of 4.7%. The NAR also announced that occurring home sales fell 5.9% between September and October 2022.
Rising Prices
The prices of homes in the real estate market are expected to continue to rise in 2023. This is due to a shortage of available homes on the market, which is driving up the prices of homes, especially in popular cities (e.g., San Francisco and New York City) where the prices of homes have been steadily increasing. In addition, they expected the low mortgage rates available for the past few years to remain low, making it easier for buyers to purchase a home.
Increased Focus on Sustainability
As the world grapples with climate change, sustainability is becoming an increasingly important focus for many individuals, businesses, and governments. In 2023, this focus is expected to become even more prevalent in the real estate market, with many homes implementing sustainable practices to reduce their environmental impact.
This includes replacing old, inefficient appliances with new, energy-star models, which use far less energy than their predecessors. Additionally, these tools can help reduce the amount of electricity consumed in the home and reduce the household’s dependence on traditional energy sources.
Mortgage Applications Are Slowing Down
It’s no secret that mortgage applications have been slowing down in recent months. With the rise in interest rates and the overall uncertain economic climate, lenders have become much more cautious when approving loans. This could lead to fewer people being able to purchase a home in 2023, as lenders may be more selective about who they approve for a loan.
Final Thoughts
2023 is expected to be an interesting year for the real estate sector. With the current economic uncertainty, prices may remain low in some areas while increasing in others. However, the overall trend is expected to be positive as the economy begins to pick up. That’s why buyers must research and understand the local market to determine the best home investment time.
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