Real Estate Outlook

The real estate market in 2023 was expected to be more balanced and predictable than in recent years. We still saw home prices rising but at a slower pace than in 2021 and 2022. This is due to a number of factors, including rising interest rates, inflation, and a shortage of homes on the market.

● Slowing home price growth: Home prices are still expected to rise in 2023, but at a slower pace than in previous years. The National Association of Realtors (NAR) predicts that home prices will rise by 5.4% in 2023, down from 16.9% in 2021 and 10.7% in 2022.
● The National Association of REALTORS® reported that home prices continued to rise in the second quarter of 2023. National median prices fell 2.4% year-over-year to $402,600. Median home prices rose by 8.5% compared to the previous quarter.
● More homes for sale: The inventory of homes for sale is expected to increase in 2023, as more homeowners decide to sell and new home construction picks up. This will give buyers more options to choose from and could help to moderate home price growth.
● Rising interest rates: Interest rates have risen in 2023 as the Federal Reserve tries to combat inflation. This will make it more expensive to buy a home, but it could also lead to more sellers putting their homes on the market, as they become less affordable to hold.
● Current interest rates for a 30 year mortgage are hovering above 7.5% which is the highest they have been since early December of 2000.
● Affordability challenges: Higher home prices and interest rates will make it more challenging for first-time homebuyers and other buyers on a budget. However, there are still a number of government programs and other resources available to help these buyers purchase a home.

Buyers are likely to have more options to choose from, but they will also need to be prepared for higher interest rates and affordability challenges. Current trends in buyers include:

● Increased demand for sustainable homes: Buyers are becoming more interested in sustainable homes that are energy-efficient and environmentally friendly. This trend is likely to continue in 2023, as more homeowners and buyers become aware of the benefits of sustainable living.
● Growing popularity of remote work: The COVID-19 pandemic has led to a surge in remote work. This trend is likely to continue in 2023, and it could have a significant impact on the real estate market. For example, more people may be willing to move to less expensive areas if they can work remotely.
● Rise of iBuyers: iBuyers are companies that use technology to buy and sell homes quickly and easily. iBuyers are becoming increasingly popular, and they could have a significant impact on the real estate market in 2023.

If you are thinking about buying or selling a home in the next 6 months, it is important to be aware of the
latest trends and developments in the real estate market. Working with a qualified and LOCAL real estate
agent can help you to make informed decisions and get the best possible deal.

Polly Leadbetter
Engel & Völkers Foothills