New Real Estate Trends & Forecasts for 2023 and Beyond
WORDS: Diana Smith PHOTOGRAPHY Supplied
The COVID-19 pandemic has affected the world in many ways, but no other sector experienced quite as many changes as real estate. The developments in the industry were both negative and positive, from skyrocketing home prices to surprisingly affordable mortgage rates. The industry is still being affected by a number of factors, but the future may be a bit brighter than the current state of the market. With that in mind, here are some of the most important real estate trends and forecasts for 2023 and beyond both sellers and buyers should keep in mind:
Relatively low mortgage rates
The onset of the pandemic has seen some of the lowest mortgage rates in recent history, going around 3% all across the globe. This favorable climate encouraged an increasing number of individuals to opt for homeownership, including those who previously thought this goal is unreachable. As a result, the availability of suitable properties became more scarce, and the market got more competitive than ever before. This is likely going to present an issue in the future as well. While mortgage rates won’t be quite as low, they aren’t expected to increase drastically either.
A sudden rise in home prices
Although mortgage rates dropped, home prices quickly increased during the same period. This is likely due to poor market offers and high competitiveness combined with greater accessibility to home loans. Unfortunately, the current projections don’t see home prices dropping anytime soon. In fact, they’re expected to continue rising, although at a significantly slower rate. However, this may be mitigated in the near future. As interest in homeownership rises, investment in new developments increases as well, meaning that the market may become more saturated and stable in the following years.
A change in sought-after locations
Due to the increasing prices and poorer offerings on the market, homebuyers are slowly moving away from central locations. This is most prominent in cities like Sydney, for instance. Here, buyers are slowly moving away from Central Sydney and more towards the neighboring suburbs. As a result, it’s become quite common to hire an experienced Inner West real estate agent to help prospective homeowners find suitable properties in this attractive area. An expert agent can aid clients in finding the best homes for their needs, while also providing greater value for real estate in a pleasant neighborhood.
A rising need for affordability
Across the US, on the other hand, an increasing number of individuals are looking into purchasing their own homes instead of renting. While prices are rising, affordable mortgage rates have made homeownership more accessible in recent years. However, previously-owned homes currently represent the most popular options in the market, rather than new developments. The main reason for this is the more agreeable price and better overall value of these homes. This shows that more affordable environments are still preferred among buyers, and that there is an ever-growing need for affordable housing options in the country.
Millennials as homeowners
As the market continues to evolve, Millennials are now beginning to dominate real estate all over the world. This shouldn’t come as a surprise, considering the fact that a significant percentage of this generation is now at the right age and financially stable enough to venture into homeownership. If sellers want to take advantage of these market changes, leveraging the Internet is the best course of action. This generation is known for thoroughly researching online before making purchasing decisions. Other factors that might attract Millennials include sustainability, affordability, plenty of usable space, and proximity to bustling cities.
The use of novel technologies
The real estate sector is transforming thanks to novel technology, and will only continue to adopt new solutions in the following years. Online home selling platforms, smart home technologies, and applications are already widely used. In fact, there’s a noticeable increase in tech startups servicing this industry, with many focusing on making real estate transactions faster and easier. Similarly, artificial intelligence (AI) will likely play an important role in the sector, with building management, design, and organization being among the best areas of application to watch.
Due to sudden social and economic changes, the current state of real estate is quite messy and confusing. As time goes on, the market will likely become healthier and more stable, presenting better opportunities for sellers and buyers alike.