Those looking to buy or sell a property in 2023 will be faced with a shifting market, with the availability of houses for sale set to increase while the prices of homes will decelerate – meaning that they are not growing as quickly as in previous years.
As of October 2022, only 127,000 homes were sold in the 100 largest housing markets, compared to over 262,000 just a year earlier.
So, does this mean homeowners waiting to cash in on their investments should start looking for a new way to make an extra $100K per year? Not quite? Read on to learn all you need to know about adopting a shifted marketing pricing strategy to get your home’s best possible selling price.
But first, what is a shifting market?
What does it mean that the market is shifting?
A shifting market means that the current market differs from the one we previously experienced. In property, we’re moving away from a seller’s market and entering a more balanced one or even a buyer’s market.
Because of this, property sellers need to adapt to the new market and use a different strategy shortly.
Darren Robertson explains, “As of 2022 and moving into 2023, the US housing market is seeing a decrease in buyer demand and the number of showings and a subsequent deceleration in housing prices.
However, this doesn’t mean that houses are losing their value – homes are still appreciating but at a much slower rate than we’ve seen in previous years.”
What is market price strategy?
A market price strategy is when you set your house price depending on the current state of the market. Since the US housing market is seeing a decrease in buyer demand, you’ll need to consult your real estate agent on your best options. Some strategies for 2023 include:
Improve your home’s condition
If your home could use some TLC, it’s time to bring out the paintbrush and start improving. Since houses are less in demand in 2023, you’ll want to ensure that your property is as appealing as possible to avoid getting lost in a crowded market.
Make sure only to make a reasonable amount of improvements – since the housing market is decelerating, you could lose a lot of cash after the sale.
Go with an expert agent that knows your local area
When looking for an estate agent, choose one that knows your local area well. They’ll have the best knowledge on what sort of selling price you can expect and will have a better chance of marketing your home to the right people.
Utilize recent and comparable house sales.
Do your research and check out the selling prices of similar homes in your local area. This is the best way to get an idea of what the housing market is currently doing. Alternatively, you could set up a free evaluation of your property.
What’s the best strategy for pricing a home?
The best market price strategy is to compare your home to others in your local area with a comparative marketing analysis (CMA). While it’s a good idea to consult a real estate agent on your current property value, a CMA will give you an honest indication of what you can expect to sell your home for.
CMA’s will compare your property to others in your local area and come to a price using multiple factors such as the size and condition of your home and the local housing market. Using this software, you’ll find a realistic price that will attract potential buyers to your property.
Using this strategy will also stop you from selling at a lower price to sell your home as quickly as you can or being optimistic and setting the price too high, only to have your house sit on the market for months.
What are the key indicators which affect real estate values?
The real estate market is heavily influenced by outside economic factors such as growth, inflation, and interest rates. The number of homes currently on the market will also affect the evaluation of your property.
Here are the key factors that affect real estate:
Fewer homes on the market will increase prices in local areas, and vice versa; more homes will lower real estate value. It’s a good idea to consult with a local real estate agent to understand the state of your local real estate or do your research.
Banks offer better mortgage rates depending on the state of the economy. For example, in previous years, banks lent buyers up to five times their income and showed low deposits. As of 2023, it’s now harder to secure an attractive mortgage, meaning fewer people are applying, and the housing market is depreciating.
Property demand depends almost entirely on the economy’s state and potential buyers’ income. If the economy is growing and revenues are increasing, more people will likely invest in houses, and subsequently, the value of properties will go up. In a recession, fewer people will have the money to afford a new home, and property prices will go down.
Interest rates have a detrimental effect on mortgage payments. If a country is seeing a rise in interest, this has a knock-on effect on the cost of monthly fees, and fewer people are likely to risk buying a property.
High-interest rates make renting more attractive, increasing rent payments and lowering property prices.
Will property prices fall in 2023?
While property prices are not expected to fall in 2023, they will stagnate. This is due to mortgage rates increasing by over 7 percent, making purchasing a property less attractive to buyers.
According to experts, the median price of homes for sale will rise by approximately 5.4 percent – less than half the pace of 2022. This shift will see the market favoring buyers over sellers.
The 2023 housing market is shifting
With the shift from a buyer’s to a seller’s market, those putting their homes up for sale will need to adopt new strategies to achieve the best possible price.
The best options are to compare properties to others on the market and set realistic goals and expectations.
Housing prices are expected to stay largely the same for those looking to buy. Buying in 2023 is, therefore, a good option for those looking for a reasonably priced property.
To stay on top of price alerts and changes, check out our Price2Spy software – our plans are designed to suit any budget, from basic to enterprise level.