It’s that time of year again! The new year is upon us, and that means it’s time to start thinking about our real estate goals and projects for 2023. If you’re like most of us, you’re probably feeling excited about what this new year of possibilities may bring. Before making major life changes, we all usually want to do some research to get guidance in our decision making.
Each year, the experts at 23 Legal compile a list of the top real estate predictions and trends to help our clients with their endeavors. Are you curious to see this year’s predictions? Read on for inspiration to move forward in real estate projects you’ve been considering, such as moving, renovations, investments, and estate planning.
If you’re thinking of buying a home in the next few years, it’s important to be aware of the latest housing market trends. By understanding what’s happening in the real estate market, you can be better prepared to make a smart purchase. 2023 is shaping up to be an optimistic year for both buyers and sellers! We expect the housing market to grow steadily, though prices may rise faster than in recent years. That said, we don’t expect the housing market to revert back to pre-pandemic days.
Buyers will have more leverage with current mortgage rates and flexibility of location. And sellers continue to prosper due to low market inventory and high home equity. Rent growth is expected to be 5.4% throughout 2023, leading to a shift in how new homeowners view their investment decisions. Read on to learn more!
Here are 23 Legal’s housing market predictions for buyers and sellers in 2023…
1. Home prices will continue to rise.
The median home price in the US is currently around $225,000. That’s up from $170,000 in 2013 but still below the pre-recession peak of $230,000 in 2006. We predict prices will continue to rise in 2023, reaching a new all-time high of $250,000.
2. Mortgage rates will also rise.
Mortgage rates are currently at historic lows, with the average rate on a 30-year fixed loan below 3%. But as the economy continues to improve, we expect rates to start rising in 2023. We also predict that an average 30-year fixed rate will be around 4% by the end of the year.
3. More people will move to suburban and rural areas.
The pandemic has forced many people to reassess their priorities, and most people are now looking for more space and a slower pace of life. We predict this trend will continue this year, with more people moving to suburban and rural areas.
4. The inventory of homes will increase.
The number of homes for sale has been low in recent years, but we can expect this to change. With more people moving to suburban and rural areas, we’ll probably see more homes hitting the market in the coming months.
5. Baby Boomers will downsize.
The Baby Boomer generation is near retirement, and many are downsizing to smaller homes. It will continue as more Boomers seek to simplify their lives and settle down.
6. Millennials are entering the housing market.
Millennials are now the largest generation. They are entering their 30s and starting families. We predict that this demographic will enter the housing market in 2023 as they look for more space and stability.
7. The “gig economy” will impact the housing market.
As more people work freelance or contract jobs, this trend will begin affecting real estate as more people opt for flexibility in their living arrangements. Finding a space to work from home comfortably is a high priority.
8. Technology will keep changing the way we buy and sell homes.
Technology has already changed the way we perform real estate transactions and list homes, and we expect this trend to continue. From online home-buying platforms to 3D home tours, technology is making the home-buying and selling process easier and more efficient.
9. Sustainability will be key in the housing market.
Sustainability is becoming a significant factor in the housing market. Data research points to more buyers preferring energy-efficient and environmentally friendly homes in 2023. Protecting the environment is a high priority for millennials and Gen Z in making purchase decisions.
10. We will see a shift in the way we use our homes .
The pandemic has also caused a shift in how we use our homes. More people are working from home, and we are using our living spaces for more than just sleeping and eating. Including working out! So, buyers will continue to look for homes that accommodate their changing lifestyle needs, whether it’s a home office or private gym they require.
Tips for Buyers
Buyer demand continues to increase, but there is a limited inventory. New homebuyers are likely to make a move to purchase their homes before mortgage rates increase. Locking in a home at a lower rate, especially for a longer period, will benefit buyers. And though prices are rising slowly, buyers should be able to find a home that fits their budget.
For first-time buyers, rent growth will slow down, making rentals more affordable. Since home prices are expected to go higher, affordability might be an issue. But we are optimistic that a surge in multiple-unit construction will provide plenty of opportunities for you to invest in real estate and buy your own space.
Tips for Sellers
If you’re thinking of selling your home, now is a great time to do so! Prices are rising, so you can likely make a profit on your home. Additionally, there are more buyers than homes on the market, so you should be able to sell your home relatively quickly. New construction is likely to halt, and ready-to-move-in homes will be in higher demand.
So it’s the right time to sell. However, if you’ve recently refinanced, you will see no short-term financial incentives in selling. We advise you to hold back and enjoy the home equity you’ve built over time. If the mountain of tasks that come along with selling your homes seems overwhelming, 23 Legal is in your corner!
Make Moves in 2023 with 23 Legal
The housing market is constantly evolving. As always, nothing is permanent and we can expect to see more changes in the years to come. Baby Boomers downsizing, Millennials entering the market, the rise of the gig economy, and new technologies will all have an impact on the way we buy and sell homes. Sustainability has also become increasingly important as we look into the future.
Overall, the 2023 housing market looks very promising! We can help you take action on your real estate planning for the new year. Regardless of how unpredictable the future is, one thing is certain: hiring an experienced real estate attorney will help you make smart, informed real estate decisions this year. As we always say, “Don’t sign that document!”
What are you waiting for? If you want to buy, sell, or plan your estate, connect with Ben Weaver at 23 Legal. With decades of experience and a growing network, our firm is one of the most trusted and appreciated real estate attorneys in Illinois.
Do you have any big real estate plans for 2023?
Whether you’re buying, selling, or estate planning, 23 Legal is here to help with the legal process and offer guidance!
Contact us today: (847) 447-6004
Why Choose 23 Legal
23 Legal offers Real Estate and Estate Planning legal services to individuals, families, community associations and small business owners throughout Chicagoland. We know how intimidating “the law” can be. In fact, when most people think of law offices, they think of stuffy leather chairs, huge wooden desks and pompous lawyers who charge outrageous fees. That’s not us! We believe in 1-to-1; the same lawyer should work with you all the way through. Whether you have an estate planning issue, family trust concern, or you have a legal problem in regard to a new home, business, real estate or remodel, you need a lawyer who cares. That’s where Ben comes in! We are great listeners; more than that, we are lawyers who believe that our clients always come first.