What Will Happen to the Housing Market in 2023

By Doug Cary

Doug Cary has been selling real estate in Davis County since 2005. He is a 2nd generation top producing Real Estate Agent.

As we end the year and begin 2023, a lot of people have been asking me about the state of the market and what’s going to happen in 2023. The year started strong, but we knew that kind of environment couldn’t last. 

If you would’ve told me at the beginning of the year that interest rates would double, I would have been surprised because I predicted a lot worse. Even though home prices have dropped a bit, we’re still probably going to end the year at or above where they were when the year started. 

One thing that is truly down is the number of home sales. In our area, they’re down 43%. This is similar to how the market was in 2018 and 2019, which means the market is normalizing. Additionally, interest rates are around 6% and are expected to come down even more.

I asked Santa Claus for a crystal ball, but I didn’t get it, so I don’t know with certainty what’s going to happen in 2023. However, I can tell you that right now, sellers are selling at a pretty fast rate. If a house is clean, updated, and priced correctly, it will sell very quickly. 

Even with this market pace, one great thing for today’s buyers is that they aren’t paying drastically over the listing prices anymore. Now, buyers can do appraisals and inspections, which is also a sign of a normalizing market. Today, buyers can negotiate to get closing costs paid or get a couple of years’ worth of interest paid with 2-1 buydowns. This combats the higher interest rates. 

As we move into 2023, a lot is dependent on what will happen with interest rates. If interest rates come down to 5% or 4%, we’ll see home prices go up quite a bit again. Plus, FHA, VA, and first-time homebuyers will not be able to get a home as easily as they can today. If you have any questions or want to talk about your specific scenario, call or email me. I look forward to talking to you soon!