7 Real Estate Market Trend Predictions for 2023

Real Estate markets everywhere have seen unprecedented changes in recent years. What’s up next, and how will it affect your plans and finances in the years to come?

The past several years have been filled with enough change and upheaval for several lifetimes, and the best-laid plans of both buyers and sellers have frequently fallen by the wayside. That’s why predicting the future in this market moment feels particularly fought with peril and pitfalls.

All of that said, there are some trends on the horizon and a few safe bets about the housing market for 2023. While we’ll no doubt see plenty of continuing challenges, there are always opportunities to be had if you know where to look.

Home Sharing

For those who are footloose and fancy-free thanks to remote work, setting down in one place may not be in the cards. Home-sharing options are becoming more popular, with Pacaso leading the way in shared ownership.

Renting to Own

Renting to own sounds like an old-fashioned notion, but some property technology companies are adding a more modern twist to the concept. Investment companies like Divvy Homes are making some of their inventory available as rent-to-won properties and then helping renters purchase those homes by setting aside part of their rent payments as down payment funds.

With record-high home prices and affordability struggles in every major market, innovative solutions can help buyers put together a financial strategy that works for them. It’s not just convenient – it’s good for families who may have had their savings impacted by the economic challenges of the pandemic.

House Hacking Growth

Real estate investment, but not everyone has the means to finance a portfolio of homes. Enter house hacking, a popular shortcut to real estate investment designed for those who are willing to put a little more personal time and effort into achieving their investment goals.

There are a variety of ways to house hack-from purchasing a home and renting it out to roommates or on Airbnb to buying a duplex, triplex, or quad and living in one unit while renting out the others. Some house hackers buy a home with an accessory dwelling unit (ADU), such as a garage apartment or pool house, and tent out the extra space or, on occasion rent out the larger space and live in the smaller one.

Essentially, house hacking involves using OPM (Other People’s Money) to pay down the mortgage and then using the equity to buy another house and another after that. Houses can be hacked year after year until you’ve built up the portfolio you want to manage long-term.

The Return of the Downsized Home

With record-high home prices, some older homeowners may be unable to resist the lure of selling their big family home at a premium and then buying a smaller home or simpler-to-maintain retirement condo. This could be especially tempting for people in preretirement whose careers were disrupted by the pandemic or for those who find themselves with insufficient income in retirement.

In addition, the Great Relocation may mean that many families find themselves with less need for a large space to gather. If the kids and grandkids are now living farther away, many retirees and pre-retirees may once again be thinking about downsizing.

Multigenerational Living

On the other side of the equation, some extended families may have decided to blend their households. This offers a way of dealing with the challenge of affordability and allows older family members to retire in place.

Making a home suitable for multigenerational living may mean making alterations to the home’s interior to improve accessibility, adding space on the main level, splitting up an open-concept home into discrete spaces, or adding a dedicated exterior entrance. Work together to ensure that everyone has input on the transition.

Fixer-Upper and Additions

During the buyers’ market of the later 2000s and early 2010s, buyers came to expect that they would be able to demand turnkey homes in their neighborhoods of choice. They got used to having everything on their wish lists, including laundry lists of repairs following the home inspections. In most cases, those days are over and buyers may now need to put in some work to create their dream homes.

From adding space to doing their own repairs and upgrades, buyers will find more to choose from in a low-inventory market if they’re willing to contribute some elbow grease. If you’re thinking about buying a fixer-upper, talk to a trusted real estate professional to find a reliable contractor, or reach out for a highly rated and well-reviewed gig worker on platforms like TaskRabbit.

Exceptional Outdoor Spaces.

Outdoor spaces have been at a premium through the pandemic, and there’s no sign of this slowing down. Whether you’re looking for a single-family home with a big backyard or a balcony attached to a city condo, everyone wants a little spot for alfresco living. Spending more than two years indoors seems to have given everyone a new appreciation for wide-open spaces, wherever they can be found.

If you’re thinking ahead to your next move, a real estate professional has the guidance and insights you need to see what’s coming up on the road ahead and can help you prepare for it.