Real Estate Predictions for 2023. Will mortgage rates continue to climb? Will housing prices drop? Are you considering buying on The Main Line but are waiting to see what the 2023 housing market will do? Hi, I’m Kimmy Rolph and I specialize in helping Main Line PA buyers make the best buying decisions, with the help of the national experts, of course. As we head into 2023, we are likely to see home prices cool slightly. Considering in many areas following the pandemic, Main Line included, we were looking at upwards of 20% increases, this is a relief for buyers, and something we have been telling sellers for the last year. Inflation is around 8% and the interest rates are climbing and at roughly 7% at the time of this filming. The national sale of previously owned homes dropped slightly by 1.5 percent and they are selling at the slowest pace in a decade. However, we are not seeing this locally. Around the holidays,we always adjust for seasonal slow downs, but on The Main Line, conditions continue to be favorable for sellers. Since it is a luxury area and also has benefitted from the flexible live work office arrangements since the pandemic, many people have decided to make the Main Line move. As a result, the inventory is still constricted and my sellers are getting over asking for their homes. For buyers, there is definitely an increase in inventory on The Main Line, but financing must be in place and escalation clauses or paying over ask has been common place. Here are what several experts are predicting for 2023, Dennis Shirshikov, a strategist at Awning.com and a professor of economics and finance at City University of New York, predicts“Continued inflation, overall higher interest rates, a potential recession, and geopolitical tensions will force 30-year and 15-year mortgage rates up throughout 2023 and will bring the two rates closer together as short-term risks rise,” SImilarly, Robert Johnson, a professor of finance at Creighton University’s Heider College of Business, also predicts increases in interest rates, “By the end of 2023, financial market participants expect that the Fed will have increased the target Fed funds rate by 175 to 200 basis points from current levels. That would translate into 30-year and 15-year mortgage rates at roughly 8.50 and 7.70 percent,”. Alternatively, Nadia Evangelou, a senior economist and director of Real Estate Research for the National Association of Realtors, offers a three track scenario for interest rates where“In scenario #1, inflation continues to remain high, forcing the Fed to raise interest rates repeatedly. That means mortgage rates will keep climbing, possibly near 8.5 percent. In scenario #2, the consumer price index responds more to the Fed’s rate hikes, and there is a gradual deceleration of inflation, causing mortgage rates to stabilize near 7 percent to 7.5 percent for 2023. In scenario #3, the Fed raises rates repeatedly to curb inflation and the economy falls into a recession. This could cause rates to likely drop to 5 percent,”
Each of these predictions do not speak to those who are not dependent on conventional financing. Many of my Main Line buyers and I are finding ways around conventional financing to take advantage of a slightly cooling market. Where we are looking at luxury homes, often the financing structures look different. If you are considering buying on The Main Line in 2023, let’s discuss your options. Hopefully the future is bright for Main Line buyers and sellers in 2023. Kimmy Rolph sells The Main Line and local areas!
