How 2023 will Redefine Real Estate

Fashion and real estate have one thing in common—both are defined by trends.

Talking about real estate, it is reshaped by the trends being triggered by customers’ preferences, economy, and market conditions.

In 2021, real estate was ruled by the sustainability in building construction, the urbanization of suburbs, the lowest foreclosure rate in at least 20 years, slow mortgage rates, and personalization in amenities.

How will Real Estate behave in 2023?

Given the current market scenario, financial condition, and ever-increasing millennial population, the US real estate is likely to go through the changes given below.

1. Price, Price, Price

Although “location, location, location” will be an evergreen piece of advice in real estate, the new one can be “price, price, price” this year.

This is because affordability would be the key factor among homeowners, especially among millennial buyers. Now that we’ve seemingly touched the ceiling of insane property prices, it looks like home buyers are paying more than required.

For example, many people want to live in Tribeca which is one of the most expensive neighborhoods in NYC, but their budget makes them settle for affordable options in Crown Heights and Ridgewood. Surprisingly, these affordable neighborhoods have everything to make living easier for residents.

We can expect home buyers to shift to the cheapest places when they would be priced out of the expensive areas.

2. The Ever Increasing Importance of Marketing

Marketing your home is important when it comes to selling it, especially amidst an emergency or sluggish real estate market. The same thing goes for a real estate firm that is looking to establish its ground in a highly competitive market.

Nowadays, whether it’s a homeowner or a real estate firm, everyone is using social media and online directories to get their home or services exposed to a maximum number of visitors. After all, everyone makes their searches online.

If your home isn’t listed on the Internet, it might sit on the market for long. Likewise, you as a real estate agent might be losing your clients to your online competitors.

You need to do various things to boost exposure for your listing. You can get started with online marketing by having accounts on social networks. Post videos, photos, blogs, and other valuable content on Instagram, Twitter, and LinkedIn to get visibility.

3. The Slowdown in Price Rise

According to industry expert CoreLogic, home prices could grow at a rate of 5.4% between October 2021 and October 2022.

The pace in price appreciation would be down compared to October 2021. This might be because, in recent years, the pace of growth and property values have been more rapid than the wages.

This has affected affordability, despite the low mortgage rates available. Luckily, the price rate is likely to slow down to a normal level.

4. The Decline of Mortgage Interest Rates

Mortgage interest rates have been low in 2021—steadily going below 4% for common types of loans. If the prediction of an economist is to be believed, the interest rates will remain around 3.7% for a 30-year mortgage and 3.2% for a 15-year mortgage. Lower mortgage rates will encourage the buyers to buy a home as soon as possible, thereby driving the real estate market for the sellers.

However, this decline can’t be guaranteed as it could be affected by the tariffs, prompting the Federal Reserve to increase interest rates to balance things.

5. The Preferences of Millennials

According to one survey, the largest percentage of millennials can be as much as 30% this year. Moreover, they will own over 50% share of the mortgage market by the middle of 2022. The oldest millennials will be in their late 30s. This is the age when most people are likely to own their first home. They made up the largest group (37%) of homebuyers last year.

According to the National Association of Home Builders, millennials might have different home preferences than boomers and generation X. The NAHB analysis found that the majority of them want to live in the central city than in the suburbs. Besides, they increasingly prefer new homes built for sale over custom-built homes. Making the list of desired amenities among millennials is a laundry room, patio, and hardwood floors.

These preferences of millennials can bring changes to the real estate industry that is currently selling prebuilt homes five times more than new homes.

6. What it Would Be Like Buying and Selling Home in 2023

Starting from the home buyers, it might be challenging to buy an entry level home. Securing your dream house before someone else does can be tough. However, buyers with a big budget are likely to face less competition.

We all know sellers face some challenges while selling their properties. And this year, sellers of entry-level homes would have a great time as those will be among the hottest property this year. This also alarms the higher-end sellers to price their homes right while selling the home.

So these are the trends that will define real estate. Do you have some more trends to share with us? Let us know by commenting below.