Each market in this country is different but they are all seeing similar trends. The days of the seller getting everything are over and the market is balancing somewhat. Below are tips from the experts in different markets across the country on what to expect for home sellers going into 2023
Jean Wawrzyniak-Fry of Mesa Real Estate says, “Currently, the interest rates have risen to around 7%. The combination of that and the amount prices have risen in the last 2 years has priced many buyers out of the market. The amount of homes selling in the Phoenix area has dropped significantly. Only 22.3% of homes sold in the Phoenix metro were affordable to those earning the median family income. Homes are no longer selling over the weekend….they sit for 30 to 60 days.
The market is not favoring the seller. In the Phoenix area, most cities are balanced or lean toward a buyer market. Sellers need to price their homes competitively. They need to be prepared to accept contingent offers. They need to be flexible about the possibility of accepting concessions. They need an experienced Realtor. A popular concession is for the seller to offer to pay toward lowering interest rates. This can help the buyer and not cost the seller as much as a price cut. The days of the seller getting everything in the world are over.”
Frank & Karen Baker in Sunset Beach NC state that “predicting trends for the upcoming year can be a risky business but in an article in the latest issue of Realtor magazine published by the National Association of Realtors, Economist Lawrence Yun states that the housing recession we have experienced recently that was caused by the sharply increasing interest rates is not what we may think it is. He feels that the inflation we feared has already peaked based on the falling price of gasoline and the strengthening of the dollar against other currencies. He also thinks that although inventory conditions are modestly higher than last year we are still experiencing a residual housing shortage. He concluded by saying that mortgage rates have shown signs of stabilization recently indicating that the decline in sales and homebuilding should be over soon. This would seem to predict a good year for home sellers in 2023.”
Conor MacEvilly of Seattle Real Estate offers this advice; ” If you are thinking of selling your home in 2023 the most critical thing will be getting the listing price correct. The listing price is always important but even more so in a slower market. The best homes that are priced correctly and properly prepared for the market will always sell regardless of the prevailing market conditions. However, in a buyer’s market, over-priced homes will just sit on the market, become stale and the sellers will probably have to “chase the market downward” by making price cuts before the home finally sells. The “let’s list it high and see what happens” strategy does not work in a slower market. Price your home based on what the market is doing at the time you list your home, not based on what it was doing back in the booming market of early 2022.”
Lori Wyatt, Chicago multi-family real estate expert advises: “My predictions for the 2023 market are still optimistic. Even though rates have gone up, there are still buyers looking for homes. Millennials are entering the market, and they are the biggest group of home buyers since the baby boomers. There is still a shortage of inventory to fulfil the growing demand. This won’t be changing anytime soon. So, while those who don’t “have” to move may stay put, there are still plenty of people who will be looking to find their first home. Even though prices have come down slightly, we have not seen any sort of “crash”. In fact, demand will remain strong as buyers will still need homes, and there is now way that builders can catch up with the deficit that exists any time soon. This means sellers should still consider selling as there will be less competition, and a group of buyers who will still be in need of a home.”
Tina Saporito in Palm Desert offers this advice: ” I believe the real estate market in 2023 will remain strong, at least in my primary selling area, the Coachella Valley. Deciding on the asking price of a property will be the biggest challenge for sellers in 2023. Seller’s that are pricing their home based off most recent sale comps are having more success in the current market than seller’s that are basing their list price off sale comps from six months ago. The market has shifted, and it shifted fast! It’s important for sellers to remember that the real estate market between 2020 and 2022 was not a “normal” market and we’ll likely not see this type of market again anytime soon.
Interest rates are the main driving force slowing the real estate market, mainly because affordability has become an issue. First-time buyers and investors are both taking a step back from the real estate market. Increasing interest rates are making mortgage payments higher than what is practical to afford and are also lowering the rate of returns on investment properties. In 2023, homes are likely to sit on the market for longer periods as buyers have more choices and they don’t have to make offers on day one of a home coming on the market. Sellers that are willing to get creative and provide buyers with closing credits to buy down interest rates, will have more success selling their home quickly.”
Maggee Miggins of Miggins Real Estate in Summit NJ offers these tips for sellers; “It’s important to know your market and your buyer. Buyers have a lot more leeway than they did just a couple of years ago. The key now is to work with an agent. A year ago you could pop a sign in your front lawn yourself and it’d be sold by lunch but that is not the case any longer. Sellers should have agents that know the market, when to list, how to list, how to stage and how to get every penny out of a sale. FSBOs may be leaving a ton of money on the table IF they even get an offer.”
Pam Pester in Commercial real estate advises: “Commercial Real Estate Will Not Escape Global Economic Turbulence in 2023
Economic uncertainty is never good for business and commercial real estate is no exception. The combination of fears of recession, global disruption, and rising interest rates have started to take their toll on the economy in general and on commercial real estate. Rising interest rates have already caused cap rates to rise to put downward pressure on pricing. Deal volume has slowed both in the capital markets and in commercial leasing.
Office leasing has still not rebounded fully from work-from-home arrangements. Many companies are still struggling to determine their office size needs. Expect to see lower leasing volume and smaller leased spaces.
Even the one mighty industrial sector shows signs of slowing down. Retail giant Amazon is paring back its warehouse footprint across the country after it aggressively added more buildings to its network to meet a pandemic-driven surge in e-commerce demand. Amazon recently closed or canceled 44 facilities and delayed the opening of 25 sites. ”
The real estate market will certainly be different over the next year or so with rising rates and changes to the inventory. The key is knowing when to buy and sell and how to track micro-markets to ensure a successful sale.
