Ep 155: A Crash or Correction? Let’s Look at 2023 Housing Market Predictions
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Headlines are saying that this will be the year of the housing market crash. But are they saying that because it’s true, or just because they want you to read their content?
In the first part of his multi-episode series, David Sidoni analyzes data and reports from industry experts to give you the real scoop on what 2023 holds for home buyers. Taking a look at rent, mortgage rates, home sales, prices and more, David bypasses the pessimism of the newspapers to tell you the truth: this year, the market will be getting back to normal instead of spiraling toward disaster.
Here are the biggest takeaways from today’s discussion:
- Why housing market will likely return to normal in 2023
- What the experts mean when they say it’ll be a “slow year”
- How first-time home buyers should navigate the slowing market
- How skyrocketing rent prices will influence the housing market
[01:48] Here’s What The Experts Are Saying
To help form his predictions for 2023, David tuned in on what industry experts are forecasting. According to his research, economists and notable real estate publications are sharing a relatively cynical perspective on the housing market in the upcoming year. Some even report that there’s a “real estate reckoning at hand.” While that sounds scary — and it could be for those who are working in the industry — it’s actually really good news for you as a home buyer.
And, while some sources are projecting doom and gloom for 2023, don’t fall prey to that sort of thinking. Instead, it’s most likely that the housing market will simply return to normal. After a red-hot market the past two years, real estate has gotten over the peak and it is settling back into normalcy.
[10:00] How the Patterns in 2022 Set Up the 2023 Market
David discusses how some experts’ predictions show that it won’t be a buyer’s market, but instead there will be a better balance between buyers and sellers: AKA a normal market. Home prices and mortgage rates peaked in 2022, meaning that home buyers need to reset their expectations in 2023 as home sales slow down… Some even go so far as to say it will be nobody’s market.
Despite all the uncertainty that will come this year, if you’re ready to buy a house, buy a house! Learning how to navigate this kind of market can turn this potentially sticky situation into an amazing opportunity.
[20:40] Rent Is Going Through the Roof
According to an article from Bloomberg, 1.4 million renters reported a $1200 increase in their bill over the past year. Everyone (and David means everyone) is experiencing a staggering increase in rent from all over the country. Some headlines are reporting that rent is decreasing, but don’t be fooled. They’ve already doubled in the past 5 years, so it’s a stretch to pay the bill even if your rent cost is starting to plateau. As vacancy rates hit an all-time low, landlords will be afraid to keep raising rent in case fewer and fewer people decide to rent over buying a house. So, rent will see a subtle decrease, but nothing to shake a stick at.
Economists say it will take one of two things to tame the insane rent costs:
- The government raising rates to force a recession, OR
- An increase in housing supply that can sufficiently meet the demand
Unfortunately, there is no way that housing supply will meet demand, so that leaves the market with one option. Believe it or not, this is actually a great time for renters to consider buying a home.