The 2022 housing market was a rollercoaster of a year, so much so that Marty Green, principal at real estate law firm Polunsky Beitel Green, describes it as two very different movies…
“The first half of the year, with mortgage rates in the 3s and 4s, was like “Fast and Furious.” Houses were selling at a fever pitch in a matter of days, with multiple offers, waived contingencies, and buyers paying $100,000 over the asking price. High-octane stuff. But the housing market in the second half of 2022? “The Big Chill” or “Frozen.” The number of home listings dried up, contracts were canceled, the few buyers still out there demanded concessions, mortgage rates spiked to 7% and homebuilder sentiment hit rock bottom.
Some experts suggest the market will remain frozen well into 2023 while others believe it will shift to more of a buyer’s market – but is it too soon to tell? Check out these 2023 housing market predictions.
Mortgage rates declined for six weeks toward the end of 2022, rising hope for potential homebuyers, although last week marked the second straight week that rates rose again, now up to 6.48% from 6.42% the week prior. One year ago, the average rate was 3.22%, less than half of the current average rate. This shift will likely encourage potential homebuyers to continue holding off on a home purchase until those rates decline.
Meanwhile, Tampa Bay saw its biggest decline in luxury home sales in over a decade in 2022, with a 43.8% decline from 2021. “These markets are prohibitively expensive for most buyers even when the economy is thriving, so it’s not surprising more buyers would back off during a downturn,” according to Redfin’s latest report.
Build-for-rent is also growing as home purchases dip due to high mortgage rates and limited inventory. The demand for these properties is high even in our local community. GTIS Partners closed on a $4.3 billion build-to-rent project in Tampa in early 2022.
“The National Association of Home Builders recognizes the potential of the build-for-rent sector… there were 68,000 BFR construction starts over the four quarters ending in Q3 of 2022, up 42% compared with 48,000 such starts during the prior four-quarter period,” report HousingWire.
With that being said, Floridian’s confidence is down, but there is hope. Mortgage applications have risen, homebuyer sentiment ticks up, and Fannie Mae announced buyers’ moods have improved.
The housing market looks a lot different than it did one year ago, “if anyone thinks they are going to sell real estate in ’23 like they did in ’20, ’21 or early ’22, they aren’t going to make it,” Nick Bailey, the president of RE/MAX said. Check out HousingWire’s recent article, Agents gear up for a turbulent 2023 housing market.
