Now that we have our feet fully settled in 2023, we know the real estate housing market has seen significant changes. Since the beginning of the 2020 pandemic the market has gone through some ups and downs, making it challenging for buyers and sellers to navigate. With interest rates and the market changing seemingly every day, it has been confusing. In this article, we will discuss the current real estate housing market, including its trends, challenges, and opportunities. We will also provide tips for buying or selling a home in the current market and share resources and tools to help you stay informed.
Understanding the Real Estate Market vs the Housing Market
It’s essential to understand the difference between the real estate market and the housing market. The housing market and the real estate market are often used interchangeably, but they are not the same thing. The housing market refers specifically to the buying and selling of residential properties, such as single-family homes, townhouses, and condominiums. This market is driven by consumer demand, interest rates, and economic factors, and is influenced by factors such as population growth, job availability, and the availability of credit.
On the other hand, the real estate market includes all types of properties, including commercial and industrial properties in addition to residential properties. This market is driven by a variety of factors, including supply and demand, interest rates, and economic conditions, among others. While the housing market is a subset of the real estate market, the two markets have some overlapping factors and influences, but they also have unique characteristics that set them apart.
Real Estate Housing Market Trends in 2023
As of February 2023, the median price of a U.S. home has decreased by 1.2% compared to the previous year, with the average selling price at $386,721. The decline in home prices can be attributed to the elevated mortgage rates that have put homebuyer demand on hold causing sellers to lower their expectations. The number of homes sold in February 2023 was 22.8% lower than the previous year, with a total of 322,845 homes sold in comparison to 418,397 homes sold in February 2022. Moreover, the average 30-year fixed mortgage rate in the United States stands at 6.3%, which is up 2.5 points compared to the previous year.
The housing market has seen a decline in homebuyer demand due to the increase in mortgage rates, which has caused a drop in home prices. The decline in home prices has resulted in sellers having to lower their expectations, which has led to a decrease in the number of homes sold. The rise in mortgage rates has put homebuyer demand on hold, which has caused a drop in sales in major cities like San Jose, Austin, and Miami. The decline in home prices has brought house hunters back to the market, but homeowners are hesitating to put their properties up for sale due to their mortgage rates being substantially below today’s level and sellers in their neighborhood slashing their listing prices. The housing market is expected to continue to fluctuate in the coming months, with more housing markets expected to go negative year over year.
Impact of COVID-19 on the Real Estate Housing Market
The COVID-19 pandemic has had a significant impact on the housing market, with both short and long-term effects. As a result of the pandemic, the demand for housing has shifted dramatically, with many people looking for larger homes and more space for remote work and schooling. This has led to an increase in house flipping and residential real estate investing. However, the pandemic has also caused supply chain disruptions, leading to a shortage of materials and construction labor, which has led to higher prices for new homes. Moreover, the pandemic has caused a significant shift towards remote work, causing many people to rethink their housing needs and preferences.
The pandemic has also caused financial instability for many households, leading to a rise in mortgage delinquencies and foreclosures. Additionally, the pandemic has led to a significant decline in the number of homes being put up for sale, creating a shortage of available homes for buyers. The shortage of available homes has led to bidding wars and increased competition, driving up home prices. Now in 2023 the threat is over and though people are going about their lives in the new normal, the impact of the economy still lingers.
Current Challenges and Opportunities in the Real Estate Housing Market in 2023
The current housing market presents both challenges and opportunities for buyers and sellers. One of the most significant challenges is the shortage of homes for sale, making it challenging for buyers to find their dream home. However, this shortage provides an opportunity for sellers to list their homes and potentially receive multiple offers.
Another challenge is the high competition among buyers, leading many to offer above asking price and waive contingencies. However, in the last 2 years buyers’ luck has changed overall. Todays sellers are more willing to negotiate closing cost and other expenses to close the deal. As a buyer make sure you are talking with your realtor to see if there is a way for sellers to help you out when it comes to extra costs.
Navigating the New Normal in the Real Estate Housing Market in 2023
In today’s real estate market, staying up-to-date with the latest trends and working with an experienced real estate agent is essential for navigating the buying or selling process. A knowledgeable agent can provide valuable insights into the current market conditions and help buyers and sellers make informed decisions. They can also guide inexperienced buyers through the process and help them avoid hidden pitfalls.
The current housing market is characterized by a shortage of homes for sale and high interest rates, making it challenging for buyers to find the right home or for sellers to receive an offer on their property. In such a market, it’s crucial to remain patient and flexible with timelines and expectations. It may take some time to find the perfect home or receive the right offer, but being open to unique opportunities and adjusting expectations can help navigate the market successfully. Moreover, educating oneself about the homebuying or selling process, planning for the future, and avoiding common misconceptions can also prevent expensive mistakes. Overall, working with a reliable agent and keeping a flexible outlook can help buyers and sellers navigate the current real estate market successfully.
Predictions and Forecasts for 2023
The future of the real estate market in the US is uncertain if the current trends continue. The decline in home prices and the decrease in the number of homes sold are worrying indicators of a possible slowdown in the real estate industry. The national average 30-year fixed-rate mortgage rate is increasing, which could deter potential buyers from purchasing homes. However, some experts predict a moderate increase in home prices, which could help balance the market. The low inventory of homes for sale remains a significant issue, which could continue to drive up home prices in certain areas.
Moreover, the decline in home sales is likely to have a ripple effect on the broader economy, impacting industries such as construction and retail. The decline in home sales could lead to a slowdown in new home construction, which could lead to job losses in the construction industry. Additionally, the decrease in home sales could lead to a decline in retail sales, as homeowners may be less likely to invest in home furnishings and appliances. Ultimately, if the trends continue, the real estate market in the US could experience a significant slowdown, impacting not only the housing industry but also the broader economy.
However, despite the recent dip in home prices and the decrease in the number of homes sold, there is hope for those seeking to purchase a home. Mortgage rates, a key factor in the long-term cost of purchasing a home, are influenced by several factors, including the state of the economy and the policies of central banks. One potential policy that could lead to a drop in mortgage rates is the Bank Term Funding Program, which allows banks to borrow funds at a lower interest rate, which they can then lend out to consumers. This could lead to increased competition among lenders, resulting in lower rates for borrowers. In addition, if people start buying mortgage-backed security bonds, it could also lead to lower mortgage rates. When investors buy these bonds, it provides more funds for lenders to lend out to consumers, resulting in lower rates. Overall, both of these scenarios could lead to more favorable mortgage rates for borrowers, even if the housing market continues to show a slowdown in the short term.
Tips for Buying or Selling a Home in the Current Market in 2023
If you’re looking to buy or sell a home in the current market, here are a few tips to help you navigate:
- Work with an experienced real estate agent who has knowledge of the current market.
- Be patient and flexible with your timeline and expectations.
- Get pre-approved for a mortgage to show sellers that you’re a serious buyer.
- Consider offering above asking price or providing other incentives to stand out among other buyers.
- Consider offering to cover closing costs so that buyers will be able to afford your house and you can move onto your next endeavors.
- Be prepared to act quickly if you find a home you love or receive an offer on your home.
Real Estate Housing Market Resources and Tools
Staying informed and up-to-date on the real estate housing market trends and news is essential when buying or selling a home. Here are a few resources and tools to help you stay informed:
- Real estate news websites, such as Realtor.com and Zillow.
- Online home value estimators, such as Zillow’s Zestimate.
- Real estate market reports from local real estate agents or associations.
- Social media groups and forums for homebuyers and sellers.
Consider a 1% Commission Agent
If you’re considering selling your home during these unprecedented times, it’s important to keep in mind that every penny counts. That’s why it’s worth considering working with Sell For 1 Percent Realtors, a brokerage in Columbus, Ohio that offers to list and sell your home for a commission rate of just 1% of the final sale price. This is significantly lower than the standard commission rate of 6% (3% to each agent), which can add up to thousands of dollars in commission fees for the seller.
By opting for Sell For 1 Percent Realtors, you can save a significant amount of money on commission fees while still receiving professional real estate services. Most of their clients choose to offer 2% commission instead of 3% for a total savings of 3% commission on the final home sale price. For example, if a home sold for $300,000, the seller saves $9,000 to put towards their new house or anything else they may want. If you’re looking to cut costs and maximize your profits during the home selling process, Sell For 1 Percent Realtors is definitely worth checking out.
Conclusion: Preparing for the Future of the Real Estate Housing Market
The current real estate housing market presents a unique set of challenges and opportunities for both buyers and sellers. With rapid technological advancements, such as online listing platforms, virtual reality software, and blockchain technology, buyers and renters are more informed than ever before, and it’s important to stay ahead of the competition by understanding market trends. This means that sellers must be patient, flexible, and prepared to act quickly to receive an offer on their home, while buyers must have strong ideas of what they are looking for and be ready to adapt to the demands of the market.
To successfully navigate this new normal in the real estate housing market, it’s essential to stay informed and work with an experienced real estate agent who knows the market. An agent’s role is to make your offer the most attractive to others, and their negotiating skills and local market expertise can help you make the most of the current market trends. With resources like the National Association of REALTORS®, buyers and sellers can access the latest real estate research and statistics that affect the industry, giving them an edge in the market. By being informed, patient, and prepared to act quickly, you can find your dream home or receive an offer on your home in this evolving and dynamic market.
