What does the future hold? I ask myself this same question every late December, and my answer is the same that most attorneys give, “It depends.” What does the future hold for Real Estate is an easier question to answer, especially when industry leaders share their insights with us. One of those leaders is Lawrence Yun, Ph. D., the Chief Economist and Senior Vice-President for Research for National Association of Realtors. Earlier in December, Yun along with leading economists from National Association of Home Builders, CoreLogic, Realtor.com, and Bright MLS gave Realtors like myself their best ideas of what 2023 will look like for real estate. Here are the top takeaways:

How did the Real Estate Market finish in 2022? Not as good as 2021, but better than 2019. The effects of Covid-19 pandemic on the real estate market were felt in every market. The emergence of virtual offices allowed workers to work remotely and it started the exodus from large cities.

The suburbs became the place to be and own, which drove prices through the roof with a lack of supply. Some markets, like Austin TX or Salt Lake City UT, doubled their median home sale prices in less than a year. Beginning in Quarter 2 of 2022, the number of sales began to drop. The increase of mortgage rates, the worries of inflation, and the lack of inventory (of existing homes and new construction) all made 2022 end up short of 2021.

Is 2022 the beginning of the last housing bubble? The answer was a profound NO from all members of the Residential panel. Looking at Job Cuts, Mortgage Delinquency, Foreclosures, and Inventory, the data reflects a very strong residential real estate market. The buzz word “correction” is a better description of real estate 2022, not “bubble”. Where is the next Austin or Salt Lake City? All signs point to the Southern US for real estate value growth. Job growth is a great indicator for where to watch and states like Florida, Georgia and North Carolina is forecasting better than pre-Covid times for this. Will 2023 be the best year to buy? It depends. Mortgage rates have jumped up in 2022 to curtail inflation, but they forecast a decrease in the next 12-15 months in the rates. As for the home sales forecast, the macro point of view sees fewer transactions in 2023 but ticking up closer to 2024 to be even with 2019 transactions. The issue is that we don’t know if the anticipated dip in 2023 is due to lack of real estate being sold OR lack of real estate being offered to sell, and it may be a combination of both.

See the entire podcast, including insights into commercial real estate, at https://www.nar.realtor/research-and-statistics/research-reports/on-the-horizon-markets-to-watch-in-2023-and-beyond. Contact us for details on the Aspen Snowmass real estate market.