Can you believe it, 2023 is less than 6 weeks away! If you are thinking about selling your house soon, you may be interested in how the housing market has reacted to all of the changes over the last couple of years and what it will mean for you and your Park City real estate
There is no way to know for sure what the market will be doing in 2023. Real estate and market experts know a lot about how a market works, evolves, and responds to changes in the economy, allowing them to find facts based on current trends. Here are some things you can expect if you plan to sell your Park City home in 2023.
The market in 2022
Q1 2022 started out as a seller’s market, the demand for houses was greater than the supply of houses available. A seller’s market is positive for sellers because it means they have the leveraging power; buyers do not have as many options, ultimately meaning they will pay more for a house than they might if there were a surplus of other houses for them to consider. However, by Q2 2022, the housing market was directly influenced by rising mortgage rates and inflation fluctuations and we saw a jump in the amount of available inventory and a slump in the amount of homes selling. By Q3, the real estate market was unnaturally being “corrected”, meaning it was forced into a “correction” by the Federal Reserve. Q4 is showing inventory at an all time low, when comparing year over year since 2019, and we have not seen a huge correction in available inventory pricing in the Park City markets. Is it possible that once the federal reserve stops intentionally trying to slow pricing, could there be another boom?
2023 for buyers
The days of sellers receiving multiple offers and bidding wars ending in sales significantly above market value are quieting in most areas. However, in some luxury segments and high demand neighborhoods, we are still seeing these situations. Most recently, (as of Q4 2022) a high profile $11.5M Deer Valley ski-in/ski-out home came available on the market, saw multiple offers and went under contract in less than 9 days. Other areas are showing signs of quieting, where less desirable and older inventory is sitting on the market for double the amount of days than what we saw over the last 2 years.
By definition, a buyer’s market takes place when the supply of property exceeds the demand, and most experts do not consider this likely to happen by 2023. There is a notable supply shortage of inventory, on top of the pandemic stalling labor and supply for new construction and it will likely take some time for that to change.
Experts are seeing signs that while supply will not likely exceed demand in 2023, buyers will have more leverage. Interest rates aren’t that far off what they were in the last 7-10 years, and we know they will continue to go up higher than what they are now. There is less intensity to the process, and buyers are seeing more control of the process, allowing them to be able to leverage their negotiating power.
Inventory in 2023
Inventory in the housing market is the number of unsold properties on the market, and it directly affects how the market develops, which has been low in recent years. Will inventory levels rise in 2023 in both new builds and resales? While the last couple of years have given us record-low inventory levels, the levels are steadily increasing as more houses come onto the market, making 2022 the first year-over-year increase
since 2019. This is expected to continue; however, some experts believe the change will be gradual enough that inventory levels will still be below typical levels for the expected future.
Mortgage rates in 2023
Mortgage rates are still rising, which is part of the reason buyers are likely to get more negotiating power by lowering demand. At the start of 2022, a 30-year fixed mortgage was, on average, 3.22%, and by November, it was up to 6.4%. That’s higher than 2021 rates but still significantly lower than the historical average of 7.77%.
Experts are not sure how much the mortgage rates will change in the near future. If there is one thing they seem to agree on, it seems unlikely mortgage rates will fall in 2023 to levels of the last few years. It’s most likely that rates will remain around 5%
-6% through 2024.
What this means for sellers
Considering the many factors influencing the real estate market, it seems likely the demand for housing will continue to exceed supply, giving sellers the advantage. However, it is also true buyers will have more bargaining power. Even though the value of property continues to grow, the appreciation of housing is expected to hit the lowest rate of increase since 2018.
Home sellers in 2023 can expect selling their homes to take longer (more days on market) with fewer offers on the table. The unusual benefits for sellers which have made up the market in the past several years do not appear to be reversing; they are merely no longer increasing. Selling your house in 2023 will still offer distinct advantages.
If you plan to sell your house in 2023, you will need a stellar Park City realtor to make the most of the market to turn it to your advantage. A Utah native and Park City ambassador, Liza Story knows everything there is to know about the local lifestyle and real estate market. With a creative drive to assist clients and a far-reaching network, she has unique skills to meet her customers’ needs.