Financial, Real Estate

2023 Real Estate Trends

Real Estate
From rising house prices to migration from bustling cities, there are a number of key trends emerging in the real estate market this year.

Here are the key trends to watch in real estate this year:

Digitization of house viewing

Digitalization was accelerated across many industries during the pandemic, including real estate. When buyers needed to stay at home and sellers were unable to welcome viewers into their properties, digital processes helped keep the real estate market moving.

The use of technology-enabled buyers to search for properties and view them with 3D tours without leaving their homes. As the convenience and efficiency of digital services became more apparent, agents, buyers, and sellers continued to utilize them even as pandemic restrictions were lifted.

Virtual staging is also becoming increasingly popular, with searches online for this topic increasing by 23 percent within the past five years. Furthermore, more communications between agents and buyers or sellers are taking place online through apps like Zillow.

Mortgage applications made online are also increasing as banks accept digital applications.

Once a buyer is moved in, the use of tech tools doesn’t end there. Apps like Next Door are used for social networking with neighbors, with searches for Next Door increasing by more than 180 percent in the last decade.

Technology continues to streamline the real estate process in 2023, such as using commercial real estate prospecting databases to reach key sellers.

Migration to the suburbs

There are trends indicating new migration patterns emerging in the United States too. The movement of people from metropolitan cities to quieter suburbs is another pandemic-fueled trend but is expected to continue to at least 2025.

A number of different factors are at the root of this, with one being the drive for larger homes with more rooms and outside space. These types of properties come at a high premium in urban areas such as San Francisco and Washington D.C.

Another factor is affordability. While wealthier buyers may be migrating to the suburbs by choice, younger and lower-income households are having to move to more affordable housing as a necessity. As bills are rising and wages in many industries stagnating, taking on large mortgages with high monthly payments isn’t doable for a growing percentage of the population.

In the suburbs, taxes are cheaper and rents are generally lower in comparison.

High prices are not deterring buyers

Another trend, which may seem contradictory to the point above, concerns rising house prices and demand staying high. Single-family homes are in extremely high demand in many areas of the country in 2023, and rising prices don’t seem to be deterring these buyers from making offers.

In fact, the number of buyers putting in offers substantially above the asking price is on the rise. When they know that they are not the only prospective buyer putting in an offer on a listed property, bidding above the asking price will make them more attractive to the seller.

Rising prices also mean that home equity continues to rise too, this means that current homeowners have increased home value against the amount owed on it.

Low but slowly rising home inventory

Low home inventory, meaning a lower-than-usual number of properties being listed, has been an issue in many areas for a while now. House hunting is becoming increasingly difficult for prospective buyers as the most desirable homes are snatched up very quickly.

Low home inventory means buyers need to make sacrifices. For example, they may have to cut down their list of ‘nice to have’ house features and be less picky. Getting preapproved for mortgages is also recommended by agents, as is expanding the search field.

For sellers, there is less competition. However, high-interest rates mean buyers might struggle to get a mortgage agreed upon.


More on this topic:

Maximizing Your Chances of Success When Investing in Real Estate

Maximizing Your Chances of Success When Investing in Real Estate

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