Real estate market predictions for 2023

by Timothy Inklebarger

Featuring the perspectives of:

Art Aguilar, Branch Production Manager, Revolution Mortgage
Paige Bowman, Team Leader, The Mortgage Collective – Fairway Independent Mortgage Corporation
Jeremy Collett, Executive Director of Capital Markets, Guaranteed Rate
Alyson Griffin, Branch Manager, CrossCountry Mortgage
Jared Turner, Founding Partner – Realtor, Turner Magnum Real Estate
Julia Wang, CEO and Broker, NextGen Real Estate

What do you expect for the overall housing market in 2023?

Art Aguilar, Revolution Mortgage: The housing market in 2023 will be similar to what we saw in 2022. Home prices have increased and unfortunately will outprice some homeowners right out of the market. Affordability issues will be more of an issue for the first-time homebuyer, but overall, it will be a balanced market.

Paige Bowman, The Mortgage Collective: Personally, with all the currently information we have at our fingertips I think that we can expect housing to actually be better for buyers and sellers in 2023. Sellers are still selling their homes for more than they would in 2019 and I think based on the market buyers will see a slow down on rates. With this we should see a pick-up of real estate transactions starting in Q2 of next year, or hopefully sooner.

Jeremy Collett, Guaranteed Rate: We can forecast, but nothing is certain. The Mortgage Bankers Association (MBA) believes that housing prices will likely level off, but the higher-rate environment will mean that fewer homes will sell or refinance in 2023. By buying low in a cooled market, once prices heat up again, the steady build in home equity offers many advantages: dropping PMI (if applicable), taking out a HELOC to invest in home improvements or refinancing with more favorable terms. No matter what, I think we will see a return to seasonality, with a focus on home sales in spring and summer when people are more inclined to move.

Alyson Griffin, CrossCountry Mortgage: I think it’s going to be a flat year, probably closer to what we experienced in 2019 due to rising interest rates and costs.

Jared Turner, Turner Magnum Real Estate: I feel the market will take a dip as far as homes sold and started, allowing construction to catch up and lower costs at the same time. This is a good thing. With that said I’ve seen the Luxury market begin to thrive as many of these Buyers are not concerned with mortgage rates and for the first time in three years, they are seeing incentives and price reductions.

Julia Wang, NextGen Real Estate: I do expect the market to correct itself after the craziness since the Pandemic and it’s already happening. Interest rates will stay high or maybe go even higher which will turn the market into a buyer’s market. Obviously, sellers will have to accommodate, and homes will most likely stay on the market for longer and housing prices will also have to decrease and adjust accordingly.

Do think any segments of the residential market will be better in 2023? (new construction, rural, luxury, etc.)

Collett: It’s hard to predict, and it may vary by market. Remote workplaces have allowed many homebuyers to explore non-urban communities, including smaller towns and even more remote areas. Rising housing demand in Montana and Wyoming is proof of that. Both new and luxury construction will likely remain strong in areas with recession-proof industries. As supply increases and demand wanes, we could see many cities enter buyer’s markets.

The affordable housing market will see some growth with the recent pricing changes instituted by Fannie Mae and Freddie Mac. With home equity so high after the home price increases of the last two-plus years, HELOCs and home equity loans should be popular. Looking at the top end, jumbo and non-qualifying loans, particularly those for real estate investors like debt service coverage ratio (DSCR) programs, will likely continue to grow.

Aguilar: It will continue to be a buyers’ market in 2023 and homes will not fly of the market as quickly as they have been. Buyers will be able negotiate seller concessions and other terms that are more favorable to them, although sellers will still benefit and profit tremendously from the increased value of their homes over the past few years. New Construction will continue to be a good outlet for potential buyers as builders are able to entice homeowners with incentives tied to closing cost, rate buydowns, and upgrades among other things to cushion out-of-pocket closing costs.

Bowman: I think right now people are buying out of need versus want. We saw a lot of people in 2020 and 2021 buying out of want and having the luxury of increasing their price point because of artificially low rates. 2023 should be a year of normal real estate transactions.

Wang: The trend, according to HAR, shows that homes priced between $500k to $1M have actually increased in activity. I believe that this is because buyers at this price point understand that you “date the interest rate and marry the house.” They can afford to pay a little bit more per month temporarily to get a better price on a home they like and refinance later if need be.

What growth, if any, do you expect for your company next year?

Bowman:Unlike some of our competitors, we have not seen a huge decrease in business in 2022, and I believe that is due to staying focused on purchase transactions in 2020 and 2021. Data shows that we should remain slightly increased on business and with the constant improvement in offered loan types and quick turnaround that provides The Mortgage Collective with an advantage in this market.

Aguilar: Our company is well positioned for this environment and continues to expand to new markets allowing each branch to thrive and outpace the competition. Our company was built by loan officers, for loan officers and even with rate volatility has continuously adding top tiered talent to our organization.

Collett: The housing market, much like the economy, is cyclical. It never heads in one direction for too long before adjusting. When things slow, opportunities arise to prepare for the next comeback. That way, when the tide does turn — and it will — we are fully prepared to ride the next wave instead of reacting to it in the moment. That’s why we continue to invest in technology to provide the best customer experience possible. We have a strong business plan in place for 2023, which is focused on fully supporting our loan officers. We offer a unique environment to set them up for success, including:

• The CEO Mindset™: When markets cool, winners with the right mindset emerge. The GR philosophy allows LOs to be the CEO of their business. They have a team they can delegate marketing and administrative tasks to so they can focus on growth.
• FastTrack: While banks can take weeks and months to close, our FastTrack program can get customers a CTC (clear to close) as fast as 24 hours and to the closing table as fast as 10 days.
• PowerBid Approval: This helps customers compete with all-cash offers. This fully underwritten credit approval shows sellers that the buyer is a qualified loan candidate and can close at the same speed as an all-cash offer.
• Pricing flexibility to win: Guaranteed Rate’s LOs control their pricing and offer the best array of products to customers, such as Lock ‘N’ Roll, which lets buyers lock in today’s mortgage rate for 90 days while they house shop with no commitment to buy.
• Dynamic Marketing. We have the best-practice model to constantly stay in front of your potential customer network.

Griffin: In the Houston market, the city will be rolling out new programs starting in January. There will be 1200 new construction units to help bridge the affordability gap. We’re lucky at CrossCountry Mortgage and looking forward to the new year. Our owner is very passionate about helping families and utilizing products and programs that not only transition people into homeownership, but a lot of times better neighborhoods for their families. It’s life changing.

Turner: Our goal is to simply keep improving on what we do, if this is attained increase market share will be inevitable.

Wang: I definitely know that NextGen Real Estate will thrive because of the value that we bring to our agents and our generous commission plans. When the market is slower, every deal and dollar counts, and agents will wake up and start realizing that they don’t want to give so much of their hard-earned money to brokerages that don’t do much for them in return.

What will be the biggest challenges for agents in 2023?

Turner: The largest challenge I feel for agents is to find their ‘place’ or ‘niche’ in today’s market. It feels as though with the dip we are in Agents are scrambling to go outside of their expertise. This can be dangerous as the time and energy spent on this could have been used to solidify your relationships and knowledge that are unique to you.

Wang: Austin has already seen a dramatic decline in the number of agents (50% to be exact) and I think we will also see a huge exodus of realtors here in Houston. It’s not going to be as easy to buy/sell as it once was and it’s ‘survival of the fittest’ which I’m okay with.

What can agents do to succeed in 2023?

Wang:Agents can succeed in this new market by constantly learning new ways to grow and market themselves. To be set in your ways is the same as death in this industry, and again, it’s ‘survival of the fittest’ so you want to be on you’re A game.

I feel the most successful agents moving forward will lean on their sphere of influence.

Is the work-from-home trend still changing the way people are shopping for homes?

Turner: Consumers will definitely be shopping from home, so it’s imperative your ‘Digital Storefront’ is on point whether it’s listings or content.

Wang: The real estate industry has changed significantly, and a lot of people are finding realtors and homes online and on social media which is why it’s so important to have a presence on these platforms. I predict that if you don’t, your business will not survive in the next five years.

What does the landscape of your company look like post-COVID? (Are agents coming back to the office? Do you have more tech? etc.)

Wang: At NextGen Real Estate, we are back to business as usual and have been continuing our in-person meetings and training. However, we always offer the option for Zoom for those who do not feel comfortable.

Turner: Turner Magnum has always been a hybrid company. We have never spent much time in the office even before COVID. A tremendous value to our clients is our ‘boots on the ground’ mentality and perspective that cannot be replicated behind a desk.

Which Houston neighborhoods or suburbs are on the rise and have the brightest housing outlook in 2023?

Turner: Communities that will be successful are ones that portray a lifestyle. With the uncertain market, we need to be offering more than just shelter but a lifestyle within the community. For many clients to make the move today they need to be sold on the home as well as the community itself.

Wang: I predict that as things get back to normal, we will see a trend toward people moving back into the city.

What impact is extreme weather, such as flooding, having on the Houston market?

Wang: I haven’t seen much of an impact, and I think many of us Houstonians have accepted this is a part of our life. However, having a generator adds huge value to a home and is a great selling point!

Turner: Weather has always been a factor here in Houston. Hurricanes, flooding, etc. has definitely impacted certain areas but I feel Houstonians have a short memory. It’s simply a matter of communicating with your clients on past flooding history, costs associated versus other areas. It’s another risk/reward conversation.


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