Plan ahead for your real estate goals with this 2023 market outlook.

What’s the outlook for the 2023 housing market? There are mixed reports out there, and while Goldman Sachs has predicted a 25% drop in the Phoenix market, they haven't provided sufficient evidence to back up their claim. Here's what we do know: there is a significant difference between now and 2007, when the market collapsed.

Back then, we had over 60,000 homes on the market for sale. Right now, we have around 20,000 homes available, which is about one-third of the inventory. Additionally, many sellers have super low rates and are not wanting to move because they want to keep their 2% and 3% rates. However, at some point, people have to move no matter what the rate is.

The low inventory in the real estate market is due to many sellers having low mortgage rates and not wanting to move unless they have a strong reason to. The market could go down in 2023 if interest rates rise or if there are local job layoffs. Therefore, it's important to look at the economy as a whole to determine how the market will play out. 

If clients want to know whether or not they should sell their homes, the first question I ask them is whether they see themselves living in that home for the next seven to 10 years. If the answer is no, it may be time to make a move because of the uncertainty in the market moving forward.

In light of this uncertainty, if you're a buyer, it's wise to take advantage of the historically low interest rates—around 5% to 6%—and buy a home that is within your budget. If things get really bad, you can rent it out and go live with your parents. You can always move back in when things get better. Also, most financial advisors I've spoken to say that owning a home paid for in retirement is a good idea, and it takes around 30 years to pay off a mortgage. If you can own a home for the same cost as renting or less, now would be a great time to do it.

If you have any questions about this topic or need help with your buying or selling plans, give us a call at 602-738-9943 or send an email at jason@thepenroseteam.com. I’d love to help.