The real estate housing market is one of the most sensitive industries, constantly changing in response to the prevailing market conditions. Knowing the trends can help you make an informed decision about whether to buy or sell a property.
So, what can you expect in the housing market in 2023?
At Thank You Heroes, we are committed to helping you make an informed decision when it comes to purchasing a home – a significant investment that can impact your financial future. To assist you in this process, join us as we take a deeper look at housing market trends for 2023 and provide guidance on navigating your decision.
Key Housing Prices Trends
The housing market is expected to continue its upward trajectory in 2023. However, the pace of growth is likely to slow down compared to previous years. According to a report by the California Association of Realtors, after rising by 5.7% to $831,460 in 2022 from $786,700 in 2021, the median home price in California is predicted to decline by 8.8% to $758,600 in 2023. Next year’s median price growth will be restrained by a less competitive housing market for homebuyers and a stabilization in the mix of home sales. In addition, according to the National Association of Realtors, sales of previously owned homes fell 7.7% in November to a yearly adjusted rate of 4.09 million units, marking the weakest rate of home sales seen in the past ten years.
For-Sale Inventory is Expected to Increase
One of the key factors driving the California housing market is the shortage of available homes for sale. However, this trend is expected to change in 2023, with an increase in for-sale inventory. As per the same report by the California Association of Realtors, the for-sale inventory is expected to increase by 5.6% in 2023, providing more options for buyers.
Mortgage Rates are Likely to Pull Back
Mortgage rates are a crucial factor that affects the affordability of homes. The good news is that mortgage rates will likely pull back in 2023, making homes more affordable. Executive vice president of market intelligence of ATTOM Data Solutions, Rick Sharga, expresses a more upbeat outlook, which analyzes real estate and property data. For 30-year and 15-year loans, he predicts that rates will peak at around 8% and 7.25% at the beginning of 2023 before gradually declining over the course of the year to hover around 6% and 5.25%, respectively. This depends on the Federal Reserve’s capacity to control inflation and scale back its impulsive rate rises.
Will Housing Demand Exceed Supply, Increasing Prices in 2023?
Although the for-sale inventory is expected to increase, more is needed to meet the growing demand for homes. With the population of California continuing to grow, the demand for homes is likely to exceed the supply, resulting in higher prices. However, the rate of increase is likely to be slower than in previous years.
Will 2023 be a Buyer’s Market or a Seller’s Market?
The real estate market has been advantageous to sellers for the last two years. In most markets, will 2023 be more favorable to buyers or sellers? According to Bankrate’s chief financial analyst Greg McBride, “affordability concerns and economic uncertainty will reduce home buyer demand, and the supply of homes for sale will remain scarce. So it’ll continue to be more of a balanced market than shifting one way or the other.” However, it’s important to note that the market conditions may vary by region, with some areas being more favorable to buyers and others to sellers.
Should I Buy a Home in 2023?
The decision to buy a home in California in 2023 ultimately depends on your personal circumstances and financial situation. If you’re planning to buy a home for the long term and can afford it, 2023 may be a good time to enter the market.
There Is No Better Moment to Act Than Now
Whether buying or selling a property, Thank You Heroes is here to assist our heroes. With our Thank You Heroes Home Rebate Program, qualified heroes can enjoy significant discounts when buying a home by having up to 100% of the closing costs paid for. Our program also offers exceptional representation to qualifying Military, Veterans, Law Enforcement, Firefighters, Educators, Health Care Workers, and Clergy selling their houses. In addition, when you buy or sell through our program, our agents will return up to 30% of the commission to the heroes.
For assistance with purchasing or selling a home, get in touch with us.
Image credit: Andrii Yalanskyi / Freedomz / Shutterstock