What to Expect from the Real Estate Industry in 2023
The many real estate market and process changes seen in recent years are likely to continue exerting an impact on us in 2023. With prices remaining high and inventory increasing, it’s challenging to predict how the market will develop. But we have a few ideas.
Here are 5 trends to look for in 2023:
1. Higher prices will remain an issue
According to Realtor.com forecasts, home prices will rise 5.4% in 2023 and mortgage payments will be 28% higher. With predictions like that, affordability is increasingly becoming an issue for home buyers. Additionally, mortgage rates of 7.4% are predicted to fall only slightly by year-end to 7.1%.
2. More agents and institutions will turn to e-closing
In 2022, the number of full and partial e-closings continued to increase. Next year will see yet more agents and financial institutions turn to digital processes to save money, improve the buyer experience, and save time. By using remote online notarization, real estate and financial institutions can cut 21 days from the process, enabling them to increase revenue by fitting more closings into the same amount of time. Additionally, remote notarization saves $97-$103 per internal transaction, which quickly adds up.
3. Inventory likely to increase
Realtor.com predicts that slower market conditions and elevated interest rates will contribute to a 22.8% rise in inventory levels next year, compared with a 4% gain in 2022. At the end of 2023, inventory is expected to be 15% lower than 2019’s average. These shifts will likely increase seller sentiment but reduce buyer appetite.
4. Buyers will worry about overpaying
No one wants to pay top price for anything. Ever. And when home prices are high, as they are now, many buyers hesitate to sign on the dotted line. The PwC Emerging Trends in Real Estate 2023 report predicts these factors will result in fewer deals. To help overcome such challenges, real estate professionals should focus on improving the transaction experience through digital processes. This can bring convenience to both buyers and sellers by reducing the expense of travelling to viewings and cutting the time it takes to close.
5. More processes will be automated
For many years, real estate transactions were processed manually. Recently, however, many professionals have started moving to digital processes that reduce human error and offer significant time savings. In 2023, more agents will use automation throughout their business, providing them with a competitive advantage. Automation will also liberate more time for agents to provide more personalized services to their clients.
Real estate professionals who focus on improving the transaction experience for their customers are likely to find more stability in what threatens to be an uncertain year. By looking at ways to digitize their processes, real estate professionals can improve both revenue and customer service.