Economic Indicators to Follow in 2023
The housing market outlook for 2023 is too early to determined but we can look at prior trends from yester years and compare those to today’s market. I try not to make predictions because many factors could sway the data. At the beginning of the pandemic, I thought for sure that the real estate market was going to drop but it did the complete opposite as people were on the move out of big cities and into large houses in order to work from home. To my surprise, real estate prices skyrocketed in most areas during the pandemic.
The crash of 2008 was felt hard around the country and some areas were hit harder by the impacts. Let’s look at a few comparisons. As we enter this year, I am not seeing the same amount of foreclosure sales as we did in 2007-2008. Homeowners have a lot of equity in their homes right now so I don’t see that trend changing any time soon. Also, employment rates are still low and there are many employers still franticly searching for able employees. Interest rates have risen since last year, but we are seeing it stabling out right now. Affordability is the primary impact in the marketplace right now. We have seen many years of growth in many real estate markets, and soaring growth during the pandemic, but it has come at a cost that people are being priced out of the market. Low end price ranges are extremely difficult to find right now. Inventory levels and mortgage rates will certainly be factors to keep an eye on for 2023.
I would recommend that you follow closely what is happening on the national, regional, and local levels. However, be careful with listening to too many voices that are forecasting hyper focused market trends. One of the dangers is that we have so many people out there selling narratives that are not supported with any facts. As an appraiser, I am always looking for trends in the market data. We have seen a strong growth for so many years, that it is hard to see what is normal sometimes. While the price of home sales and listings have always been a key trend for people to watch, it is not the only matric to a strong market. Other factors to watch are: days on market, inventory, foreclosures, concessions and more. Appraisers are here to monitor the trends and report on the findings.
Bottom Line: There has been a lot of hype about the doom and gloom outlook for the next year. Keep an open mind and watch the trends. If you’re looking for bad it will find you. I am hopeful that our area will not be as dramatically impacted by the swaying of other areas. If you need any help with figuring out the value or trends, just let me know. Thank You for your time.