As 2022 draws to a close, real estate experts and potential buyers and sellers alike are looking toward 2023, wondering what the new year will have in store. The real estate market has been unique over the past couple of years, and those looking to start buying or selling Deer Creek, OK, real estate are wondering which trends will continue and what will change in the upcoming year.
While it is, of course, impossible to be sure about what will happen in the future, market experts can use history and current trends to predict a possible future for the market. For anyone interested in homes for sale in Deer Creek, Oklahoma, below are some of the likely possibilities for the real estate market in 2023.
Mortgage rates
Are mortgage rates expected to increase or decrease? Expert opinions are somewhat mixed on this point. Some people believe the mortgage rates will rise in 2023. As many economists think the market is heading towards a recession or at least a downturn, they predict that due to this and higher interest rates, inflation, and geopolitical tensions, mortgage rates will go up. One study suggests 30-year mortgage loans will average at
8.75% through 2023, while 15-year loans will average at
8.25%.
However, there are other possibilities. Some experts think an analysis of property and real estate data leads to a more hopeful outcome, predicting mortgage rates will fall throughout 2023. According to one study, the rates will reach their highest point of
eight percent for 30-year loans and
7.25% for 15-year loans early in the year. As 2023 continues, the rates will drop gradually until they hover between
5.25% and six percent. However, this prediction depends on the Federal government lowering the aggressive rate interests and slowing down inflation.
Interest rates
According to some experts, interest rates are expected to rise in the future as well. Based on historical evidence, economists think the 2023 market can end up with a
nine percent interest rate. This may lead to lower demand and low supply, creating a flat market. Despite the high percentage, it is unlikely houses will continue to sell at extreme prices like
25% over the asking price.
However, if the market goes into recession in 2023, interest rates are predicted to fall. The people who buy houses in late 2022 and early 2023 might be able to get a lower interest rate when refinancing their homes. If interest rates fall in 2023, buyers will have increased negotiation power and may be more likely to buy.
Sales rates
In general, experts agree the number of houses selling in the upcoming year will decrease. Home sales have already been slowing down, and this is expected to continue. Some studies show that new house sales will slow to around
600,000 in 2023 while existing housing sales will slow to a range of
4.5 million. In addition, the days that houses stay listed before selling may increase up to
30 days or more in the future, which is two to three times the current levels. The days of lightning-fast sales are very likely over.
Home values
Despite the lower sales rates, the prices of houses are not expected to drop in 2023 because of low inventory. However, they are not expected to increase either. Due to a variety of other factors, such as strong credit quality, limited inventory, and higher demand, prices should not fall very far.
However, other schools of thought believe home values and pricing will drop because of the higher interest rates. On a national level, home values are predicted to drop moderately between
five and ten percent, while more expensive markets might see a more significant decline. This will be due to increasing inflation as well as increasing interest rates, leading to fewer people trying to get loans.
Buyer’s market vs. seller’s markete
For the past couple of years, the market has been a seller’s market, meaning sellers have more negotiation power during real estate transactions, and the market generally favors them. People are eager to know if the trend will continue or if the market will swing toward the buyers. Due to economic troubles and rising rates, some experts believe buyer demand will go down while the available homes for sale will continue to be limited. In other words, the market will likely remain balanced rather than swinging towards a buyer’s or seller’s market.
However, other economists have a different view. They believe in the next year, buyers will get more advantages as the market turns into a buyer’s one.
Inventory
A healthy market has around a six-month supply of houses, and currently, the market possesses about half that. Considering the predicted rise in mortgage rates, homeowners are not expected to sell unless they must, as their loans will be at a higher rate. This will lead to continued low inventory. It is also unlikely there will be an increase in new housing, as builders have been decreasing construction on new houses in recent months. While it seems likely there will still be less than ideal inventory, some people believe 2023 inventory will rise as houses become more unaffordable.
Affordability
On the subject of affordability, experts do not generally expect properties to become more affordable in 2023. Even if inflation goes down and mortgage rates decrease, which is not necessarily expected, prices will remain mostly where they are, which is more than
40% higher than the market was before 2020. Home prices may be expected to go down in the future, but it is not likely to offset the rising mortgage and interest rates. Houses may end up being even less affordable instead of more.
For those looking for housing around Deer Creek and Edmond, Oklahoma,
Laura Lechtenberg is a fantastic real estate agent and a first-rate negotiator. Approaching the market with compassion, sincerity, and honesty, she is passionate about her city and delighted to help it grow. She is dedicated to helping each of her customers find their dream homes and achieve their personal goals.
