As the real estate industry enters the new year, there are a lot of unknowns about how the 2023 housing market will shape up. Uncertainty and turbulence lingering from 2022 have paved the way for heavy speculation from industry experts but there’s still no firm consensus.
With high inflation, housing affordability trouble, decreased demand and declining sales volume, the second half of 2022 was filled with volatility and industry professionals want to know if 2023 will be more of the same or if we can expect the tides to change.
“In 2023, we may see a mirror image of 2022 – a somewhat trying first half that gives way to a surprisingly strong back half of the year,” said Compass Chief Evangelist Leonard Steinberg.
If Steinberg’s thought comes to fruition, the real estate industry could finally see some calm at the end of our current storm. So, what are those working in the industry predicting for 2023?
Here are some of the key takeaways from the annual Compass Agent Survey that you should be aware of for the year to come.
Prediction #1: Home sellers will lose their advantage over buyers
The pandemic-era advantage that home sellers had is predicted to swing in favor of buyers in 2023. According to the survey which included more than 440 Compass real estate agents nationwide, buyers will have the upper hand for the first time in years.
Prediction #2: Condos and urban living will grow in popularity
Compass agents predict that condos and urban living will grow in popularity as the pandemic continues to be less of a presence in everyday life, allowing for people to return to city living.
Prediction #3: First-time homebuyers expected to struggle against more experienced buyers
Nearly three-quarters of survey respondents predict the share of first-time homebuyers to either remain the same or decline in 2023. Moreover, over 80% of those surveyed predict that the share of buyers aged 55-74 to stay the same or rise in the coming year.
Prediction #4: Southeast markets expected to outperform the national average
Out of the eight regions discussed in the survey, the Southwest was the only region where respondents predicted growth in both sales and price to outperform the national average.
It was also predicted that sales volumes in the Southwest and Pacific West markets were more likely to outperform national benchmarks than not but that price growth in those regions was more likely to be in line with the nation.
“As the market normalizes, we expect the population in the Southeast to continue to grow, fueled by a tax-friendly environment and opportunities for job growth,” said Jeff Polashuk, Compass’ regional vice president for Florida. “This continued demand will position the Southeast for another decent year.”
Prediction #5: Survey respondents are optimistic about their local markets
Overall, respondents have faith in the markets they work in. Over 22% of those surveyed predicted sales volume in their local area to grow in 2023 while only 15.9% said they expected to see the same trend nationwide.
Additionally, 79.6% of respondents predicted national home prices to stay the same or decline in 2023 while only 68.5% predicted local prices to stay the same or grow.
These predictions are just a few of the things that real estate professionals should keep in mind as they begin to tackle the new year. More than ever, 2023 is a year to stay on top of industry predictions and remember that the industry changes quickly and sometimes dramatically.
