Josh's 2023 Real Estate Market Forecast

Scary headlines sell newspapers - maybe that's why everyone has been led to believe that we are headed for another housing market crash like 2008.  That couldn't be farther from the truth, though.  The market is making a normal correction to stay healthy.  Quite frankly, the market was growing at an unhealthy and unsustainable rate in 2020 and 2021.  So if we want to call the absence of $50k bidding wars a market correction, then sure, let's call it that.  However, let me be the first to tell you that in Anne Arundel County, median prices are up in 2022 from 2021 - up by almost 6%!

Another metric that real estate professionals use to gauge the health of the market is 'Months of Inventory,' which is how many months the current supply of houses (For Sale listings) would last buyers if nobody listed another house.  Typically 3-6 months of inventory is considered a balanced market where neither the buyer nor the seller has an advantage.  From 2020-2021 we dropped under 1 month of inventory!  That is considered an extreme seller's market and was a driving factor in the housing boom we saw.  We would expect to see a 6+ month supply of homes if the market was in a decline.  I bet you would be surprised to hear that in Anne Arundel County our inventory currently hovers around 1.5 months of supply!  

One statistic we did see fall in 2022 was the number of new listings, which fell by 20%.  This would be concerning if the reason the number of listings fell was because sellers recognized that buyers aren't buying houses anymore - to me that would indicate a declining market.  But the median days to sell a listing in Anne Arundel County is currently around 6-12 days (depending on where you get your data from).  Homes are still flying off the market when they are priced, presented and marketed properly.  Sellers have just been hesitant to list, probably due to the bad info they are hearing from people who are not local market professionals.

Moving forward through 2023, I predict that we will remain in a balanced housing market.  I don't expect tons of growth in housing prices, but I do expect them to hold steady throughout the year.  As of this writing, 30 year fixed mortgage rates are right around 6%.  Many mortgage professionals are expecting to see rates drop closer to 5% (a VERY reasonable rate, historically) during 2023.  If rates drop to 5% as the 2023 Spring market gets into gear, I think bidding wars will be back!  If you are a seller, this Spring will be the best time of the year to list your home.  If you are a buyer, right NOW will probably be your best time of the year to make a move!

I wouldn't recommend running out and buying a home if you don't need one (duh!), but if you want to make a move, don't let the negative news stop you.  Call or message our team to discuss your particular situation and review your best options!