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What goes up, must come down, right?

After years of a hot seller’s market, 2022 was the year the proverbial #@!$ hit the fan, as Inman’s Jim Dalrymple wrote on Monday. “2022 may not have been a real estate apocalypse — or at least, it wasn’t in every market — but it was a stark and brutal reversal from both the pandemic years and more broadly from the last decade or so,” Dalrymple wrote.

If all you’ve ever known is the go-go market of the pandemic years, you may have little sense of what to expect from a buyer’s market. If you have the hindsight of previous markets, you may have strategies at your disposal and a good idea of what 2023 may have in store. After all, your ability to predict what’s coming for the real estate market has a lot to do with your past experiences.

Of course, even crystal balls can be wrong, and the totally unexpected can occur (looking at you, 2020), leaving even the most discerning among us struggling to come up with a coherent way to meet the moment.

As 2022 draws to a close, everyone is wondering: What’s next? Although many experts have given their thoughts on what will come in 2023, we wanted your hot take.

So you gave us your top predictions for 2023 to burning questions like: Will low inventory keep demand high despite rising interest rates? Will buyers turn their backs 0n sky-high home prices? Will teal be the hot color of 2023?

Here’s what you had to say:

  • Home prices and interest rates will level off
  • 5 percent drop overall in Florida and Texas prices … but down 15 percent nationwide
  • Property values will decline by 12 percent in 2023
  • Buyers will sit on the fence so long that they’ll miss the opportunity in front of them
  • Buyers will figure out a way to purchase. There is too much pent-up demand, and 401s will be tapped, parents will help children and lenders will find a way to lower payments more easily with longer terms or more inexpensive buy-downs.
  • The market will continue to correct through 2023 and into 2024. Values will decline, but homeownership will stay outpace the stock market. The consumer will step back to a time when owning a home was more important than just dollars and cents. What does home mean to you, should be the question.
  • The fastest-growing markets will be in the Southeast
  • For real estate agents to survive they need to loose the “ME” and focus on the “C.” After all, we’re in a service profession where the C = the Client and what’s best for them. This means educating and providing value instead of running around like Chicken Little saying look at ME … I’m this, I’m that, I’m No. 1.
  • Opendoor goes out of business
  • We may see a decent spring market if things stabilize. The demand is there, due to demographics. If rates stabilize in the 5’s, I think it could be a good, normalish year. Unless inventory stays super low or something crazy happens. After 2020, we don’t have a normal!
  • I predict that I am working smart and strong and that this market will be fine with great work ethic and a positive attitude. We set the tone, it should always be positive!
  • Slight appreciation in home values In premium locations / cities / coastal. Negligible value drops in some areas of the US. Listing inventory will be scarce nationally due to how many homeowners re-fi’d to 3 percent loans. Why move and pay more than double?
  • Rates drop to 5.75 percent in February 2023.
  • Buyers will come back strong when rates start coming down
  • inflation eases and mortgage rates move to the 5 percent range
  • The residential and commercial sectors continued strength and little price reductions excepting in the overinflated markets. Short inventory continues to be an issue across the country. Interest rates moderate.
  • Available months of inventory will settle at around 6 by mid-Q2 and stay there through 2023. Continued pressure on the mortgage industry will see significant consolidation of existing providers. Technology will help drive changes in the mortgage industry even more, resulting in two key developments – 1) quick pre-approval and pre-qual becoming the norm, 2) major updates to the underwriting process resulting in significant reductions in time, effort and cost, as most everything needed is already available digitally. We’ll start to experience the makeover of title businesses as blockchain makes an even bigger push into the Title & Escrow industry. Real virtual closings and digital deeds, based on blockchain, will become commonplace by end of 2023.
  • Continued low inventory, higher interest rates, flat home prices, continued demand, fewer agents
  • Extremely limited inventory
  • There will be between 4.5 million and 5 million sales.
  • Market appreciation, depreciation or stagnancy will be highly dependent on individual markets. The west coast and top cities of 2021 I believe will see the largest depreciation of value, especially where there are tech loss jobs. Areas where job creation and where migration seems to be flowing will continue to appreciate at a slower pace than previous years but appreciate nonetheless. The migration to areas based on job creation, lower cost of living and life value alignment I believe will see the most positive marketplaces. As a flipper and investor this is where I am focusing my own projects. So mainly the south/east portion of the country.
  • Buying demand will decrease, and interest rates will level out. Inventory will increase, mostly from older homeowners looking to downsize and/or relocate to rentals; but, there could be sneaky conversion inventory coming online as well (think building repurposing: commercial to residential, etc). This will help keep inventory on the rise as buying slows.
  • A lot more acquisitions which have already started in this last week. Some will be entire brokerages, others will be teams. It’s the same as we saw about in the last major market change. Independents going dependent. Franchises being acquired by corporate-owned companies. A lot of changing of logos.
  • 1. Amazon Homes launches. 2. A competitor to NAR launches. 3. NAR tries to buy 3. A new competitor to Motto Mortgage launches. 4. One-third of proptech companies will close.
  • Death spiral for venture-funded real estate: OpenDoor, Redfin, and Compass.
  • A slow selling year for Realtors due to lower buying demand as higher rates persist, economy slows, and jobs become less stable due to threat of layoffs in all industries except for service. Realtors, hold on to your hats… and your money.
  • Prices see a small retreat in most markets, buyers return in back half of 2023
  • We are going to continue viewing low inventory, not precisely for being a huge seller’s market as it was, but because sellers won’t want to sell due to new conditions from buyers (expl. Appraisal contingency is back or help with closing costs) all this generated due to the high interest rates and high cost to get a mortgage loan. Sellers will want to wait until the market could give them the advantage again, or at least part of it; but we are not ready to call it a buyer’s market in 2023 not only for the lack of inventory but the still high prices (will remain almost the same with minimum decrease for some types of properties, specially luxury) and because high interest rates. Also, except for certain markets like Miami, cash investors are also going to decrease.
  • 2nd home sales will pull back but primary home sales will remain steady in Florida. Florida’s weather and appeal to older adults still remains strong. However, prices will moderate a bit but will not fall dramatically.
  • Mortgage rates go down, market prices remain flat or slightly increase, housing shortage will continue.
  • We are going to continue viewing low inventory, not precisely for being a huge seller’s market, but because sellers don’t want to sell now due to new conditions from buyers
  • A couple of competing companies will devise ways to buy more houses and sell them off by the square foot to multiple owners, thus enabling more people to buy less real estate while spending more money than ever before.
  • 2023 will suck. Prices will stay too high for most buyers even with low inventory so the market will see low volume of sales. Those that do get lucky enough to sell will have to compromise or they won’t sell. And overall we’ll see an exodus of Realtors because they won’t be making money hand-over-fist
  • Low inventory and higher rates
  • Property values in Phoenix-Scottsdale will increase about 3 percent to 5 percent
  • Fewer homes sold but at higher average sale prices in 2023 and interest rates rise
  • With the global emphasis on strengthening ESG principles for growth and operations, in 2023 the real estate technology industry will accelerate the integration of sustainability practices. It is a myth to consider sustainability as limited to the environment, because of reliance upon the efficient use of resources, such as materials, energy, time, and money. Advanced 3D technologies, including BIM, real-time 3D visualization, 3D printing, 3D renderings and AR/VR will enable the design, creation, prefabrication, and photorealistic representation of sustainable, green 3D models. Digital twins will further contribute to building resilience, fostering decarbonization, optimizing work environments, and enhancing every decision-making phase, from concept, design, construction, through operation. Beyond the environmental benefits, real-time visualization technology will attract a new generation of architects and designers, who will create enticing buildings for investors, buyers, leaseholders and stakeholders. 3D visualization may very well turn out to be the remedy tonic for a sagging 2023 real estate market.
  • Will low inventory keep demand high despite rising interest rates? The demand for homeownership will continue. Will buyers turn their backs 0n sky-high home prices? No-monthly mortgage payment amount will determine what a buyer is willing to pay. Will teal be the hot color of 2023? I hope not
  • Some agents will do very well in a challenging market

Now it’s your turn! Give us your hot takes in the comments below.

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