2023 Real Estate: It's gonna be a GREAT year!

In my mind, 2022 will always be known as the year of two real estate markets. The first half of the year was an incredibly frustrating time for buyers as inventory remained stubbornly low and sellers took full advantage of their driver’s seat negotiating position. In fact, very little negotiating was going on from January through June as sellers dictated the price and terms of nearly every sale. Historically low interest rates made the challenges of buying a home worth it for many buyers. They were willing to pay over list price, waive appraisals, shorten inspection periods, give post possession and do all kinds of groveling just for the chance to purchase a home and brag about their low, low, low interest rate. 

Then, along with the arrival of the balmy days of summer, emerged panic about inflation. The federal reserve decided to use the only weapon in its quiver – raising interest rates. And they did it A LOT. That made buyers hit the brakes as they realized that the bullet train of appreciating home prices, combined with interest rates topping 6% made their monthly payments untenable. 

Well, as I predicted, inflation seems to have peaked in October. The November report showed a long awaited slowing of inflation. And, as predicted, interest rates have edged lower, hopefully  beginning a badly needed trend. As a result, we are starting to see buyer interest picking up again and with more inventory to choose from, and sellers now offering concessions to help offset the interest rates, I anticipate that we will continue to see demand pick up. There is one caveat to that prediction however. December inflation numbers will likely inch back up again as consumers spend on the holidays. While we are still dealing with post-pandemic supply chain issues, increased buying by consumers means prices go higher. And if the numbers are enough to panic the fed, we may see another rise in rates. It is my hope that this will be a temporary blip in an otherwise steady trajectory of decreasing mortgage interest rates. Here are some other predictions for the coming year: 

1. Pent up demand will result in increased buyer activity in late winter and spring
2. The market will be more balanced than we’ve seen in a while and no longer will sellers have an outsized advantage.
3. Inventory will remain below normal which will keep buyers from having an outsized advantage
4. We will likely see a recession in 2023 but it will not significantly impact the housing market. In fact, recession often means lower interest rates so that may help boost demand.
5. In spite of an impending recession, Arizona will remain a top contender for in-migration. As baby boomers continue to age and seek out warmer retirement areas; and as we continue to grow our economy in a multitude of sectors, we will continue to see people moving here to avail themselves of our lower taxes, reduced cost of living, great weather and lots of opportunity. The only thing that might offset that to a degree is companies moving away from remote work. If that happens, it may alter the plans of those who intended to move here while working remotely. 

For these reasons, we believe 2023 will be a great year to buy or sell a home. If you’re thinking it may be time to make a move, 2023 could be your year. And Copper Summit Real Estate is ready to make it happen. Contact us and let us show you how.