Happy 2023! I hope you had a safe and happy holiday season. We’re kicking off a new year in the face of a changed housing market. Here are five things I think will happen in 2023:
Home prices won’t budge. This will be the year of the buyer-seller stalemate. Higher interest rates, stock market volatility and job market anxiety will affect what buyers will be able and willing to pay. And sellers who don’t have to sell will stay put instead of negotiating and accepting a less-than-desirable price.
Limited inventory will create competition among buyers. Higher interest rates will deter those sellers who might have intended to purchase a different home in the new year, keeping inventory turnover low. Bargain hunters will be disappointed, but well-qualified buyers will prevail.
Properties with space to work from home will lead the pack. The hybrid work model is here to stay, which means buyers will need space to work from home part of the time. Houses and condos with accessory dwelling units (ADUs), rooms or separate areas for desks and Zoom calls will be in demand.
It will be a buyer’s market for luxury condos. Buyers looking for condos in the $2M+ range will be in luck this year. There were only a few condos in contract at this price point at the end of December—and many more units available, particularly in the South Beach and downtown areas.
List price strategies will be a mixed bag. The classic list-low, sell-for-way strategy won’t be happening in 2023 across the board. Listing significantly lower than market value will be an iffy strategy in 2023, because buyers won’t be in the mood to overbid. I believe we’ll see a mix of list prices that are a slightly lower than market value—and some that are at or slightly above that level.