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What To Expect From The 2023 Real Estate Market 

By January 10, 2023No Comments

What To Expect From The 2023 Real Estate Market What To Expect From The 2023 Real Estate Market 

Want to know what to expect from the 2023 real estate market? The market is a term that you always hear concerning real estate. It refers to buying and selling houses and land and can be influenced by factors such as supply and demand, economic conditions, and government policies. A strong real estate market is characterized by high demand for properties and rising prices. While a weak market is marked by low demand and falling prices. And the state of the real estate market can have a significant impact on homeowners. 

You’re probably hearing the word “recession” being tossed around too. That’s because a recession usually follows inflation which has been a hot topic in America post-Covid. Inflation did edge down last month and has possibly peaked. Unfortunately, if it has peaked, it’s likely because we’re about to enter a recession. Mass layoffs have been announced at multiple large companies, including Facebook and Amazon, and new home builds have started to slow. Many financial experts predicted the coming recession and expect relatively high inflation with the recession throughout 2023, while interest rates on the average 30-year mortgage have more than doubled over the past year.

Housing prices have increased faster than inflation. For some, this will make purchasing a home in 2023 challenging to afford. Every market has pluses and minuses. In a buyer’s market, the buyer has the upper hand with more inventory to choose from. In a seller’s market, the seller has more power with less inventory leaving buyers to fight for their purchase. So how should buyers and investors approach this volatile real estate market? Let’s look at various aspects of the current market to see where we stand.

Flippers And Investors

Six months ago, the market was on fire and assuming you could find a motivated seller, it was usually easy to find a buyer. That is starting to shift. For flippers renovating a property that they will likely wait to sell for 2-6 months, they should assume the market will be worse than it is now. It would be wise to reduce your maximum acceptable offer from 5-10% as a contingency. Investors need to realize they may need a better deal than in the past. 


Many emergency tenant protections put in place during the pandemic have either been lifted or are about to end. Rents are consistently going up, little by little. That means rental managers can resume raising their rents. And real estate experts believe they will because landlords are anxious to get back to operating a profitable business. But there’s always a silver lining. As the hot housing market starts to cool, the current renters who found themselves priced out the past couple of years can finally revisit their dream of home ownership.

Home Buyers

Home prices rose nearly 40% from the spring of 2020 to the spring of 2022, representing roughly a decade of price gains in just a couple of years. The days of 3% or 4% mortgage rates are gone for the foreseeable future, but rates will likely settle below the pre-pandemic historical rate of 8%, according to housing economists’ consensus. People everywhere need to buy and sell homes every day, and these buyers and sellers will show up to compete throughout 2023 and beyond as the market continues to re-balance and normalize. There is likely a return to the traditional seasonality of the real estate market. Inventory will tend to rise in February and carry through the summer.

Would-be buyers pulling for prices to come back down may be left holding their breath in 2023. Buyers are likely to pay more during the spring selling season when homes tend to sell for a seasonal premium. That’s when most buyers are trying to get it done. Meanwhile, prices often peak in May or June, and costs and sales tend to decline slowly until the end of the year. So don’t sit and wait for spring and summer; start now to get a leg up.


In 2020 and 2021, record low interest rates, huge home price increases, low inventory, and bidding wars had buyers in a frenzy. This year, high mortgage rates, rising monthly payments, and loss of buying power have buyers moving a little slower.

Sales will likely remain sluggish heading into the spring. Then the buying season will pick up during the latter half of the year. The only question is how significant of a decline to expect. The determining factors of how much sales will fall include what happens with mortgage rates, housing supply, and overall economic conditions. 

Other factors to consider are the job market’s strength, wage growth, and consumer confidence, which could mitigate the sales slowdown. But there will be someone to buy your home. It only means it may take you a little longer than you might like. So if you’re considering selling in 2023, don’t wait; make a move to maximize your home’s potential

Now More Than Ever, It’s Important To Have An Amazing REALTOR®

You’ll hear all kinds of reports from experts on the real estate market over the next few months, but don’t let them scare you. If you have an excellent REALTOR® on your side, you have nothing to worry about. REALTORS® who have experience and are fantastic at what they do can help you buy, sell, and rent no matter the market. So the bottom line is find a REALTOR® you trust who offers sound advice and has your best interest at heart and forget about the rest. And if you need help, contact Living Houston. 

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