What will the housing market look like toward the end of 2023? As the housing market continues to evolve, we sought insights from real estate experts, including co-founders, CEOs, and brokers, on what to expect toward the end of 2023. In this article, we share five key perspectives, ranging from buyer opportunities in changing markets to trends across property types, to help buyers and sellers navigate the future landscape.
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- Buyer Opportunities in Changing Market
- Key Housing Market Trends and Factors
- Prepare for Competition and Realism
- Local Market Appreciation and Challenges
- Trends Across Property Types
Buyer Opportunities in Changing Market
Spring would be a great time to think about buying because of the current housing shortage. Multiple offers drove up property prices from 2021 until the early times of the previous year, while financing purchasers lost out to cash purchasers.
Buyers frequently lost many bids during this time, forcing them to make offers much over the asking price to close a purchase. Last year, the market changed, and buyers are currently in control and negotiating price drops.
You are likely to observe the return of a seller’s market as interest rates trend down into the 5% level. You might receive a better offer if you buy now. Homeowners may refinance to a cheaper rate as interest rates decline shortly, which is expected.
Doug Van Soest, Cofounder, Socalhomebuyers
Key Housing Market Trends and Factors
The housing market outlook for the end of 2023 is uncertain, but can be based on current trends:
Market Stability and Growth: Resilience and steady growth. Factors like population growth and housing demand contribute to a favorable environment for investments.
Rental Demand: Strong demand because of lifestyle preferences and flexibility. Attract tenants with well-maintained properties, competitive rates, and exceptional service.
Hotel Management and Tourism: Recovery expected with easing travel restrictions. Property owners in tourist destinations can benefit. Collaboration with experienced hotel management maximizes potential.
Technology and Innovation: Embrace technology for enhanced customer experiences. Online platforms, smart home features, and data analytics attract tech-savvy buyers and tenants.
Expert Guidance and Collaboration: Seek reputable property management companies and real estate agents for insights and help.
Johan Hajji, CEO and Founder, UpperKey
Prepare for Competition and Realism
For interested buyers, it’s essential to prepare for continued competition in the housing market. The demand for properties in Montreal is expected to remain high, so buyers may face multiple offers and bidding wars.
To navigate this competitive landscape, buyers should be prepared with a solid financial plan, including pre-approval for a mortgage, and be ready to act quickly when a desirable property becomes available.
For sellers, the end of 2023 presents an opportunity to capitalize on the strong market conditions. With high demand and limited supply, sellers are likely to continue benefiting from a seller’s market. However, it’s important for sellers to set realistic expectations and work with a real estate professional to price their property accurately.
Overpricing may deter potential buyers, while underpricing may result in leaving money on the table. Investing in staging and home improvements can help attract buyers and maximize the selling price.
Samantha Odo, Real Estate Sales Representative and Montreal Division Manager, Precondo
Local Market Appreciation and Challenges
Many local markets will continue to see good appreciation in 2023. There are a few markets (most of California, some areas of New York, and portions of Florida) that have already seen some softening in their local markets.
There may be a slight trend lower for interest rates, which will buoy sales prices and likely heat up competition in markets that have already seen good competition and higher prices so far in 2023.
The biggest challenges for real estate, regardless of locality, are going to be for homes in the upper 10-20% of any market. These homes will be hard-pressed to see significant gains versus lower-priced homes.
The biggest challenge in any market will be for starter/more affordable homes. Starter homes are in short supply and thus will see heavy competition in nearly every market.
Michael Hottman, Broker, 804michael
Trends Across Property Types
The trends I’m noticing are multifamily, apartment complexes, and commercial properties where variable rates that start expiring will have lower valuations/appraisals toward the end of the year.
Some sellers will probably want to sell their properties at a discount, as their ability to refinance their properties is based on the profit the asset generates. With higher interest rates, profits will be lower, leading to lower valuations.
With single-family homes, the market probably won’t change much—we’re in a market with very low inventory and sellers don’t want to sell because they’re locked in 30-year loans with low-interest rates, so there’s little incentive to sell.
However, buyers can get a great deal if sellers are desperate to sell because of higher interest rates. Another trend in the real estate market is the short-term rental market (Airbnb rentals), which is getting more regulated and competitive—so the ROI won’t be as good as it’s been so far.
Ryan Chaw, Founder and Real Estate Investor, Newbie Real Estate Investing
