Housing Markets 2023
The pandemic changed the home buying market in many ways. Not only did it rearrange work setups and drive property purchases in areas where mortgage rates drastically dropped, but it also opened new doors for young buyers eager to secure their first home. More than half-way through 2022, it is interesting to see what other trends await us for the rest of the year and on to the next.
A Gradual Rise in Mortgage Rates
According to the chief economist of Realtor.com, Danielle Hale, the housing market is likely to experience a “whirlwind.” Expect home sales to surge by 6.6% and home prices to grow by 2.9% in addition to the residual upturns brought about by 2021. Eventually, mortgage rates will pick up their pace, which may prompt home buyers within the 26 to 35 age range to prioritise affordability. Market competitiveness and movement will see a demand for millennial households though housing inventory is limited and builders are yet to make progress with production. In certain months of 2022, the purchase of single-family homes will possibly see an increase of 5%.
Increase Rental Rates and Flexible Workplaces
It’s a race to find and obtain affordable homes due to price and mortgage rates increases. Rising rental rates adds to the challenge. Projected to grow around 7.1%, first-time home buyers need to go the extra mile for the home of their dreams. On the brighter side, a competitive housing market comes with a competitive jobs market. We can expect higher incomes as several firms scout for and look to keep talent without negatively affecting costs. Flexible workplace arrangement will be an ongoing trend and potential homebuyers may expand their search parameters to cover new and budget-friendly areas like the suburbs or places outside the central business district.
Growing Interest in Suburbs and Low-Priced Areas
More and more buyers have set their sights on the suburbs and anywhere they can find good real estate value. The demand for these locations reduced their relative affordability, but they still present a good deal for several buyers because of their lower base price. There is a possible shift in buying methods for those who want to avoid competition. As competition in the housing market continues, buyers will be more creative in tackling these challenges. Some may even resort to off-market property buying with the help of a buyer’s representative or real estate agent.
The Challenges of Affordability
The National Apartment Association CEO and president, Bob Pinnegar, asserted that 2022 is a time when “housing affordability will remain a key issue.” Real estate and several industries around the world are in the throes of stabilizing. The pandemic has yet to quiet down. Inflation is still rife among supply chains, causing delays and creating unexpected setbacks for all involved parties, including Canberra property investment buyers, property managers, homeowners, and renters. Though affordability seems to be an age-old problem in the housing market, it will remain a primary area of concern this year and in the years to come.
The Real Estate Sector Moving Forward
Other trends you can expect to get off the ground this 2022 well until 2023 and beyond is the digitalization of real estate transactions. Brokers and agents have already been using social media, pay-per-click ads, classified ads and various forms of web marketing to spread the word about new listings and attract potential homebuyers. Some have started implementing virtual tours via GPS to save prospects the hassle of personally visiting the location while the pandemic is still ongoing. There will be a host of technology-driven developments and improvements that will gradually be incorporated into the real estate sector. We can all look forward to these positive changes.
