It’s impossible to predict the future – but looking at current trends can tell us a lot about what trends may follow and how they’ll affect the market. Take the housing market – there’s generally a pattern to trends, including costs and demand. 

The last few years have been chaotic for homeowners, house hunters, and real estate agents. World events such as COVID-19 and global shortages drastically changed supply, demand, and trends. 

This begs the question – what does the future hold? What real estate trends are on the horizon, and how will they hold throughout 2023? Let’s take a look.

Slowing Down

In 2021 the real estate market was moving at record speeds. In other words, houses sold faster than ever (in hours instead of weeks or months), rates were high, etc. It was a seller’s market, as everyone wanted a home, but there weren’t enough to go around.

However, we already see the market slowing down. Houses are staying on the market for longer, sometimes weeks, and sellers’ impossible prices and demands are no longer accommodated. Given how the world and market have changed, it is likely that this slow-down will continue throughout 2023, especially as interest rates rise.

Interest Rates Rising

If you’ve been paying attention to the interest rates throughout 2022, then you’ve likely noticed that they’ve doubled. The rates have gone from record lows to a higher (but still manageable) rate. Unfortunately, experts predict that these rates will continue to rise, leveling out around eight to nine percent for thirty-year loans.

Conversely, some experts believe that while the rates will continue to rise during the early parts of 2023, they will level out before the year is done. However, they will still remain higher than the record lows seen during the early pandemic.

Housing Prices Will Remain the Same

One would think that with rising interest rates, housing prices would drop. Generally, this happens to balance out the slump in demand for houses. However, that is unlikely to be the case this time around. Demand for houses is still high (though not as high as it had been). It is higher than the current supply, meaning the pieces can remain stable.

Remote Work Impacting Real Estate

Finally, we must address the continued trend toward remote work. Remote work allows employees more flexibility but also changes how real estate works. For example, by switching to remote work systems, companies no longer need to have an office space. This directly impacts the commercial real estate market. Conversely, people who work from home prefer additional space for a home office, altering the demands while house-hunting.