7 Real Estate Trends That Will Be Left Behind in 2022, According to Experts
Real estate has been a roller coaster these last couple of years, and 2022 was no exception. There were ups (in the prices), downs (in the inventory), and more cash offers than any reasonable human being could expect. While we can’t predict what may come in 2023 — believe me, I would have bought in Austin or Nashville in the mid-aughts if I’d known — I can ask the pros what they anticipate.
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Here’s what real estate agents, experts, and brokers have to say on the seven trends they think will stay in 2022. They also shared what we can expect from mortgage rates, and whether there’s good news for prospective buyers in 2023. Read on to see what will soon be in the past.
Going for record listing prices.
Jamie Manning of the real estate blog Exposed Brick DC predicts sellers will become more realistic about pricing in 2023. “Sellers in 2022 saw what their neighbors sold their houses for in 2021 and priced aggressively,” says Manning. “But sellers in 2023 will need to be more conservative to avoid price reductions.” The days of sky-high listing prices and guaranteed bidding wars may be over — sellers need to price their homes where they actually expect them to sell.
Racing to get an offer in.
“Buyers will have more flexibility in 2023, meaning more time to make a decision and the ability to write in contingencies,” explains Manning. Offer deadlines and waiving all inspections could be behind us as experts predict a more balanced market. Plus, as Manning says, “Inventory will likely remain low, but with a shrinking buyer pool, there will be less competition.” And that means less rush to get in an offer before you’ve even made it home from the open house.
Experiencing volatile interest rates.
Are you one of the prospective buyers currently kicking themselves for not locking in a 2.5 percent interest rate last year — especially as rates climb over six percent? You may not get the record lows again, but don’t worry. “I am hoping we will see less volatile interest rates. Many experts think they will stabilize around five percent,” says Manning.
Staging everything in brass and white.
While brass and gold have dominated staging and styling for several years now, Justin Lucas of the Justin Lucas Group predicts we’ll see less of these gilded touches in 2023. Lucas adds, “While the modern farmhouse still has some appeal, I see designers, builders, and sellers moving away from all-white and toward more pops of color.”
Splurging on the biggest house.
Nick Good, a real estate broker and investor with The Good Home Team, says buyers previously purchased the largest house with the most bedrooms they could afford. But, with an uncertain economic climate and rising mortgage rates, buyers are holding back these days. The cost, including maintenance and utilities, of a large home doesn’t seem worth it if a buyer doesn’t necessarily need it. He anticipates buyers will scale back their expectations and opt for more modest homes.
Taking out a personal loan to make a down payment.
Dino DiNenna, broker and Realtor with Southern Lifestyle Properties, says using a personal loan to fund a down payment is a risky trend that needs to stop in 2023, particularly if the real estate market cools a bit. “Doing this would be the same as buying a home with a zero percent down payment. You are still borrowing to finance the cost of your home, except for the fact that now you are borrowing from two different companies, at two different rates,” explains DiNenna.
Performing major renovations before selling.
In the past, some sellers would take on major renovations — kitchens, bathrooms, opening up walls — all before selling. But now, with the high cost of materials and labor shortages, this doesn’t make sense, explains Jeff Tricoli, broker associate with the Keller Williams Tricoli Team. Tricoli says, “Instead of spending a lot of time and money on big projects, performing minor touch-ups here and there is better.” He adds that minor projects to increase curb appeal could lead to the highest return on investment.