Whether you’re a homebuyer, real estate investor, or just someone interested in the world of real estate, it pays to stay ahead of the curve. Knowing what to expect from the real estate market over the next several years can help inform your decisions and make sure you’re prepared for any changes that may come about. In this article, we’ll be taking a look at some industry predictions for 2023 and beyond. From consumer trends to technological advances, explore our forecast of what the real estate market could look like in 2023 and how it will impact buyers and sellers alike.
Overview of the Real Estate Market in 2021
The real estate market is expected to have a strong year in 2021. Low mortgage rates, a growing economy, and high demand for housing are all contributing factors. The following is an overview of the real estate market in 2021:
Sales: Sales of both new and existing homes are expected to be robust in 2021. The National Association of Realtors® (NAR) is forecasting sales of existing homes to reach 6.49 million, which would be a 9.3% increase from 2020. New home sales are also expected to rise, reaching 1.02 million, a 12% increase from 2020.
Prices: Home prices are expected to continue rising in 2021 due to strong demand and limited supply of homes for sale. The NAR is forecasting the median price of existing homes to increase by 7%, while new home prices are expected to rise by 4%.
Inventory: Housing inventory levels remain tight, which is keeping upward pressure on prices. The NAR is expecting the number of existing homes for sale to finish 2020 at 1.42 million, which would be a 21% decrease from 2019. New home construction continues to ramp up, but it will take time for the additional supply to meet the current level of demand.
Economic Factors that will Affect the Real Estate Market in 2023
In 2023, there are several economic factors that will affect the real estate market. These include:
1. Interest rates: Interest rates are expected to rise in 2023, which will increase the cost of borrowing and make it more difficult for buyers to obtain financing. This will likely lead to a decrease in demand for properties and a corresponding decrease in prices.
2. Inflation: Inflation is expected to increase in 2023, which will erode the purchasing power of buyers and make properties less affordable. This could lead to a further decrease in demand and prices.
3. Economic growth: Economic growth is projected to slow in 2023, which could reduce the number of buyers looking to purchase property. This could lead to even lower demand and prices.
The Housing Market in 2023
Assuming the market corrects itself by 2023, which many analysts are predicting, the housing market will be back on track. This is good news for those looking to buy a house or invest in real estate, as prices will be more affordable and there will be more options available. The market crash of 2020 has put a damper on the housing market, but it is expected to rebound in the next few years.
The Commercial Real Estate Market in 2023
Assuming the U.S. economy continues to grow at a moderate pace in the next few years, the commercial real estate market is expected to stay strong through 2023. The expansion of e-commerce and the rise of co-working spaces are two major trends that will continue to shape the market.
E-commerce has been a major disruptor in the retail sector, and it is also having an impact on the commercial real estate market. The growth of e-commerce has led to an increase in demand for warehouses and distribution centers. This trend is expected to continue in the next few years as more businesses move online.
The rise of co-working spaces is another trend that is reshaping the commercial real estate market. These shared office spaces have become increasingly popular with startups and small businesses. They offer flexible lease terms and allow businesses to scale up or down as needed. Co-working spaces are expected to continue to grow in popularity in the next few years as more companies embrace the gig economy.
The 2023 real estate market is expected to be robust, with predictions of an increase in home prices, a rise in construction and remodeling projects, and continued low mortgage rates. With this forecasted growth, it’s a great time for potential homebuyers to start planning their next move. Additionally, experienced investors should look out for opportunities that will yield high returns over the long-term. By staying informed on the latest trends and utilizing the right resources, you can be sure to make smart real estate decisions regardless of where you are in your journey.