In 2023 my husband and I will mark five years in our “starter home.” It’s been a great first home, but when we bought it back in 2018 the intention was to stick around for three years tops and then invest in something bigger and better. Well, needless to say, that agenda didn’t go as planned — 2021 and 2022 were not ideal years to buy a home. I was tempted many times to capitalize on the incredible seller’s market, but of course it the daunting question after you sell is “where are we going to be able to buy next?” As much fun as some millennials make camper/van life look, that lifestyle isn’t for us or our two 70-80 lb. dogs.
I’m grateful that my husband and I were able to purchase a home in 2018. We were able to view many homes without too much pressure to put in offers right away, and once we did put in an offer it was below the asking price. A concept anyone buying homes within the past couple of years would go green with envy over.
So will 2023 still be a sellers’ market, or can we expect things to level out? According to Danielle Hale, Realtor.com chief economist, next year could be more of a “nobody’s market.”
“After several years of an unambiguous sellers’ market, the 2023 housing market could feel more like a nobody’s market. We expect to see some buyer advantages in the form of 22.8% more homes for sale, however, the increase will result largely from homes taking longer to sell amid challenging affordability conditions,” she says. “For-sale homes will remain high-priced with the national annual median price for 2023 expected to advance another 5.4%—less than half the pace observed in 2022. Still high prices mean that homeowners are likely to walk away from a home sale with significant equity if they decide to venture into the market and can find a buyer. On the whole, however, we expect home sales to be dramatically lower, down 14.1% compared to 2022 as both buyers and sellers pull back from a housing market and economy in transition. We expect the annual tally for 2023 to be roughly in line with the recent pace of home sales in late 2022.”
Most of the industry experts in our 2023 industry forecast agree, noting they expect a residential construction downturn in 2023, if they aren’t experiencing one already.
Hale expects incomes to grow in 2023, noting that the strong jobs market will keep incomes growing at a faster than historically average pace (3.9%). Unfortunately, this rate will not exceed expected inflation, which is anticipated at 4.1%, so many consumers will continue to make budgetary tradeoffs.
A recent Forbes article explains that the cities that dominated real estate-wise over the past few years will likely come behind the modest, mid-sized domestic industry hubs in the Northeast, South and Midwest in 2023 as affordability in those areas draws homeowners in.
On the multifamily side, Bob Pinnegar, president and chief executive officer of the National Apartment Association says apartment affordability is still outrageous for renters. “Pursuing sustainable and responsible solutions to address our nation’s housing affordability crisis will remain a steadfast priority in the new year. Our nation’s affordability challenges stem from an alarming supply/demand imbalance, and to properly address this we must build 4.3 million new apartments by 2035.”
Predicting exactly what will happen throughout this year is impossible, but it’s always good to keep an eye on the pulse of predictions out there. Through the past several years of supply chain disruption and economic mayhem, the PHCP-PVF supply chain has learned that diversifying product lines and vendors and finding secondary sources is key to being prepared for whatever is thrown your way.
2023 may be the year for your company to branch into new product sectors or industries altogether, or maybe shift your focus from one market to another. No matter what the year holds, I’m excited to see you all prosper and come out on top, just as you have proven capable of throughout the past several years.