With the holidays behind us, it’s time to get back to work. By which I mean: figuring out how to turn your dream Hawaiian home into a reality.
To make this the year it happens, let’s take a look at the 2023 real estate market forecast.
Whose Market Is It Anyway?
It’s been a seller’s market for several years. But according to a housing market forecast from Forbes, that trend is shifting… sort of.
Danielle Hale, chief economist at Realtor.com, predicts that this year’s housing market “could feel more like a nobody’s market.” If that prediction sounds dire to you, don’t panic. Hale’s speculation simply reflects that sellers will retain some power, but buyers will gain some advantages.
Jacob Channel, senior economist for LendingTree, is optimistic. He expects that buyers will experience greater negotiating power than during the pandemic.
So as you navigate this uncertain landscape, getting professional advice, say from a trusted real estate agent, is more important than ever.
Key Predictions
Inventory
Low inventory played a key role in housing price gains during the pandemic. Across the United States, the number of listings are projected to increase by 22.8% according to Hale.
Real estate appraiser Jonathan Miller is less optimistic. He anticipates “modest listing inventory growth” but expects many potential sellers to delay putting properties on the market.
Financing
You don’t have to be a Wall Street wiz to notice that the 2022 housing market endured high inflation and mortgage rates.
Mortgage rates are expected to stabilize so long as inflation continues its trajectory toward decreasing. This early in the year, we can’t do much more than speculate.
So let’s turn to mortgage rate projections from Freddie Mac, Fannie Mae, MBA, and NAR. Averages from their four individual projections expect a rate of 6.35% for the first quarter, 6.05% for the second, 5.90% for the third, and 5.73% for the fourth.
As always, cash buyers will enjoy huge advantages.
Home Prices
Ready for more murky projections? Keeping Current Matters compiled 2023 home price forecasts from seven different major entities and no consensus occurred.
Realtor.com predicted a 5.4% increase, HPES a 2.6% increase, and NAR a 0.3% increase. Meanwhile, Freddie Mac expects a decrease of 0.2%, MBA a decrease of 0.6%, Fannie Mae a decrease of 1.5%, and Zelman a decrease of 5.1%.
So basically, don’t expect to see a big nationwide change. Pay attention to local markets.
What These Predictions Mean for You
Whether you’re consulting the Wall Street Journal or your daily horoscope, take real estate predictions with a grain of salt. A lot can change in a year. Also, what’s happening on the Mainland isn’t always a reflection of what’s happening in Hawaii. Especially when you narrow that search to the luxury housing market.
If you’re thinking about buying a new property, the best thing you can do is to talk to a real estate agent about the market conditions specific to where you want to buy. And if you’re hoping to buy on the Big Island, give me a call.
Aloha, and welcome to Hawaii.