The housing market is a constantly evolving and changing landscape. It can be influenced by many factors, such as interest rates, economic conditions, and population trends. As we look towards 2023, the housing market is poised for some significant shifts that will impact both buyers and sellers.
Rising Home Prices
One of the key trends that we can expect to see in 2023 is the continuation of rising home prices. According to Realtor.com, home prices in Philadelphia are expected to rise by 5.5% in 2023, which is a significant increase. This rise in prices can be attributed to a number of factors, including low inventory, high demand, and increasing construction costs.
Slowdown in the Rate of Acceleration
While home prices are expected to continue to rise, we can also expect to see a slowdown in the rate of acceleration. This means that while prices are still going up, they won't be increasing at the same rapid pace that we've seen in recent years. This is good news for both buyers and sellers, as it means that the market is becoming more stable and predictable.
Seller's Market vs. Buyer's Market
One of the challenges that buyers and sellers will face in 2023 is that the market is becoming more of an "in-betweener". This means that it's not quite a seller's market, and it's not quite a buyer's market either. Instead, it's somewhere in the middle, which can make it challenging for both parties to navigate.
Another trend that we can expect to see in 2023 is continued affordability concerns for many buyers. Rising mortgage rates are expected to average around 7.5%, which is higher than we've seen in recent years. While this is still historically low, it can make it more challenging for some buyers to afford a home. However, Realtor.com also predicts that more homes will be available for sale in 2023, which could help to balance out some of the affordability concerns.
Philadelphia Real Estate Market
Looking specifically at the Philadelphia real estate market, we can see that it is still growing and attracting new residents on a daily basis. This is due in part to its relative affordability compared to other major metropolitan areas, such as New York City. In fact, a third of the shoppers looking at homes in Pennsylvania come from outside of the state.
Philadelphia has a strong foundation in the real estate market, which is evident by the fact that it has attracted more professionals looking for affordable housing options. Despite rising home prices, the average sale price in Philly is still relatively affordable, at around $350,000. Additionally, homes are still selling relatively quickly, with an average of two weeks on the market.
One of the challenges that the Philadelphia real estate market (and the overall housing market) will continue to face in 2023 is low inventory. This means that there are fewer homes available for sale, which can drive up prices and make it more challenging for buyers to find a home. However, as we mentioned earlier, Realtor.com is predicting that more homes will be available for sale in 2023, which could help to ease some of the inventory concerns.
Longer Time to Sell
While more homes may be available for sale in 2023, they may also take longer to sell. This is because the market is becoming more balanced, which means that buyers will have more options and won't feel as pressured to make a quick decision. While this may be frustrating for sellers, it could be good news for buyers who are looking for more time to make a decision.
The Covid-19 Pandemic
Another factor that could impact the housing market in 2023 is the ongoing COVID-19 pandemic. While the pandemic has caused economic disruptions and changes in work and lifestyle habits, it has also spurred demand for more space and larger homes, as people spend more time at home. This has led to a surge in demand for suburban and rural homes, which offer more space and amenities than urban areas.
As such, the demand for housing in suburban and rural areas is likely to remain strong in 2023. Many experts predict that the trend towards suburban living will continue even as the pandemic recedes. This could create challenges for urban areas, which may experience a decline in demand and lower housing prices.
Another trend that could impact the housing market in 2023 is the rise of sustainable and energy-efficient homes. As more people become aware of the need to reduce their carbon footprint and live sustainably, the demand for eco-friendly homes is likely to increase. This could create opportunities for builders and developers who specialize in sustainable design and construction.
Moreover, technological advancements are also set to influence the housing market in 2023. The adoption of smart home technology is likely to increase, making homes more convenient and efficient for residents. This could further increase the demand for homes that are equipped with smart technology and other modern amenities.
In conclusion, the housing market in 2023 is likely to be an in-between market, with neither buyers nor sellers having a significant advantage. While mortgage rates are set to rise, they will still be within the historical average, and the increase is likely to be offset by an increase in inventory and a slowing rate of acceleration in home prices. Additionally, demand for housing in suburban and rural areas is likely to remain strong, while sustainable and energy-efficient homes are expected to become more popular. With these factors in mind, it is essential for buyers and sellers to stay informed and work with experienced professionals to navigate the 2023 housing market.
Full video: https://youtu.be/h_-MiwSRuUg
Gregory Martire REALTOR Springer Realty Group
Phone (484) 997-8068 Office (484) 498-4000