Given the market upheavals in the years since the COVID-19 pandemic, looking forward and analyzing trends is more important than ever. We’ve combed the report to bring you the highlights and can’t-miss information that will impact your business in 2023.
The pace is slowing
In 2021 and a portion of this past year, real estate was moving at a record-setting speed. Homes were selling in hours, above asking and for cash. In 2023, however, expect the rate of the market to continue the slow-down seen in late 2022.
The days a home is on the market will continue to rise, there may be more negotiation over price — though average home prices are expected to stay high, at 30% more expensive than in 2019 and earlier— and rising interest rates will continue to make some buyers wary.
Remote work affects many facets of the industry
The continuation of remote work has impacts on the commercial real estate industry as well as the residential real estate side. For commercial, companies continuing to work remotely may give up their empty office spaces or downsize, leaving large swaths of commercial buildings empty for repurposing.
On the residential side, working from home means that employees may be changing their geographic location, and looking for bigger homes with dedicated office spaces. They may also prioritize homes that are environmentally friendly, in an effort to lower electric or internet bills despite spending more time at home. The report estimates that less than half the workforce is going into an office for the full work week.
Climate change impacts buyer behavior
Extreme weather and climate-based events are a common occurrence and while it may not be immediately obvious how climate change affects real estate, there is truly no bigger influence than the climate.
Extreme weather includes flooding, fires, hurricanes, tornadoes and other natural disasters. More and more often, homebuyers are avoiding areas of the country that put them at high risk of encountering one of these disasters.
Not only do people not want to live in a high-risk area, but they don’t want to pay the high-risk insurance or energy costs either. Homeowners in Florida, or other low-lying areas, must pay for flood insurance to protect against hurricanes. And, homeowners in Arizona, or other desert climates, are paying astronomical electric bills to stay cool in the summer. In 2023 and beyond, temperate and low-risk areas will see an increase in out-of-state homebuyers looking for a more even-keel environment.
Looking to list your home? Call Greg Broadbent at 860-460-6939 or visit us online at gregbroadbent.com
