Welcome 2023!

Every new year I assemble a vision board with inspiring graphics and goals that transport me into the realm of possibility.  I know.  It’s an idealistic venture, but it’s my personal opportunity to reconfigure in a hopeful way.  And then there’s real estate. Each new real estate year brings some preparedness, but equal parts buckling up for total uncertainty. I once heard the saying, “if you can’t be good, be consistent.” Thus, 2023 is just another consistent year of riding the volatile market wave.  

As we say goodbye to 2022, the post-pandemic roller coaster year of the housing market, here’s what we can forecast to the best of our knowledge for 2023. Remember (and how can we forget) between 2020-2022, the U.S. median home price rose by over 41% which likely will not return to homeostasis in a single year’s time. However, the downward trend has begun and the balloon has popped as it needed to. Housing prices capped around June 2022. A growing number of financial firms are predicting prices will fall steadily in 2023, however the disagreement lies in how much. Many suspect small, single-digit drops, and others expects prices to fall by double digits, perhaps even over 20%.  

Enter stage right another key player performing in the housing market. Inventory. This is a lesser highlighted but critical component of the new year. So far this winter, inventory, at an all-time record low, has kept pricing high. Again, supply and demand. Prices stay high but offers are a slow trickle in accompanied by price drops and strides toward presenting a better product for sale (staged, professionally cleaned, touched-up, repaired, etc...).   

So, where does that leave buyers in 2023? Well, there’s a backlog of buyers still desperately looking to get out of their over-priced rentals and start building equity. Personally, I’ve known quite a number of buyers who have saved up a hefty down payment with nowhere to go until rates appear to stabilize. But herein lies the problem. Waiting for the market to be optimal is not necessarily an optimal buying experience. When rates drop, the word gets out, competition drives prices up again and the rate advantage becomes a wash. This was the problem with 2020-2022. I advise buyers this year to get out there when rates seem to be on an upward trend, lock in a still (historically) favorable rate which can be re-financed later. Find the perfect home with less competition for a price that is fair with the terms you desire.  Keep in mind, every market is an okay time to buy if the advantage of investing outweighs the cost based on multiple factors.  

In summary, here we go 2023 – a year when anything can happen. For that reason, I suggest you turn off the tv, burn the papers and let life lead you to sell or buy based on what’s best timing for you and your loved ones.  It’s never a bad time to move if change is necessary and brings you to a more favorable place. Again, think vision board, idealize a bit, dream! Hope for better and you will find it.