The American housing market has certainly had its ups and downs.
Currently, there’s been a spike in inventory compared to last year with 54% more homes on the market. With more homes available, you’d think we’d see more buyers, but that’s not necessarily true. Home prices are going up, so only buyers in the right position are able to take action.
If you’re looking to sell your home soon, paying attention to these trends is essential. In this post, we’re going to look at 2023 housing market predictions to give you a better idea of what you can expect.
In a housing market that has so much uncertainty, selling your house isn’t as easy as listing it and waiting for interested buyers to put offers in. Keep reading to understand the near future of the housing market so you can adjust accordingly.
Buyer Leverage
Over the past several years, we’ve seen rising house prices in most markets across the country. For buyers, this has been difficult to reckon with, although it hasn’t affected the number of houses sold. Sellers had all the leverage because there were still enough buyers to make it work.
That could come to a crashing halt in 2023. With the pool of potential buyers shrinking with continually increasing house prices, the tide of leverage is sure to turn. For those desperate to sell in markets with a shortage of buyers, those who are ready to buy will have the upper hand.
Homeowners are going to have to adjust expectations to better suit the market as it is. Fewer buyers will create more competition among sellers and concessions will have to be made in order to accommodate them.
Declining House Prices
A likely result of an increase in buyer leverage will be a decrease in house prices. There hasn’t been a significant decrease in home prices in years, which will be a welcome change for buyers, especially first-time buyers.
This is far from guaranteed, however. We’re only just seeing prices enter a period of stabilization. To see a real drop in prices, there need to be fewer buyers resulting in a big increase in inventory.
Interest rates, which we’ll discuss shortly, will play a major role in the number of buyers at the ready. If they continue to rise, or even stay the same, we’re sure to see more houses sitting on the market. When this happens, prices come down, hurting sellers and benefitting buyers.
Results of Increased Inventory
Current homeowners are looking at the state of the market and seeing dollar signs. The problem with this reactionary approach is that you risk arriving late to the party. Think of the real estate market as an ocean with tides slowly going in and out over decades.
Time it right and you can make a huge profit on your home. Time it poorly and you’ll either make less profit or lose money on your home. No one said operating in this framework was easy, but if you study these trends closely, you can capitalize.
Second Thoughts for New Buyers
One trend that we think we’re going to see is a bit of buyer’s remorse from those who purchased homes during Covid. The biggest effect Covid had on the market was a huge swath of people buying bigger houses in more remote areas.
During the pandemic, when everyone was working from home, this made a lot of sense. Now that people are having to go back into the office, commute times might be longer and pandemic-era decisions might seem regrettable. We could see more homes outside of city centers hit the market as a result.
Rates Going Up, Buyers Take It On the Chin
Plenty of prospective home buyers have been patiently waiting for interest rate hikes to cease. Some may be hoping for a reversal, but they’re going to be waiting for a little while longer yet.
Most predictions point to the same thing: interest rates are going to keep rising. They’re currently sitting in the 6-7% range, but by the end of 2023, they could easily be above 8%.
There is significant interest on a 25-30 year mortgage, which is what most first-time home buyers are looking at. Buyers of all kinds are either going to have to take big interest rates on the chin or hold off on buying for an indeterminable amount of time.
Pickier Buyers
Buyers who decide to forge ahead through these interest rates will want to make sure they’re getting the right house. Due to the competitive nature of the market, buyers have been at the mercy of sellers for a long time.
With the roles reversed, it’s going to be trickier to sell less-than-perfect homes. Buyers will be fine with waiting until the perfect house comes along at the right price point rather than settling for something expensive that might still need a lot of work.
Selling for Cash Becoming the Norm
If you’re a homeowner looking to sell soon, you might be wondering where all these trends leave you. It’s going to be tricky to enter the market with a house that isn’t in perfect condition. You have to be cognizant of what buyers are willing to do at this point.
For those in challenging situations – whether it’s probate, foreclosure, or you own a house in poor condition – selling to a cash buyer is your best bet. A property investor like ibuyhomes.com can give you a fair price for your home without the rigamarole of finding a buyer in this market.
Don’t Like These Housing Market Predictions? Do Something About It
If you’re daunted by the prospect of these housing market predictions, it might be time to seek an alternative path to selling your home. Head over to ibuyhomes.com to learn more about how the process works. There are no obligations, so fill out our form and see what kind of cash offer you can get.
At ibuyhomes.com, we help homeowners sell their homes in a faster and safer way. There are no realtors, no negotiations with buyers, and no maintenance. Let us buy your home as-is so you can move on to your next property.
