The real estate market is facing some significant changes in 2023, both across the United States and in North Carolina. While these shifts will bring some challenges, savvy real estate agents can also use them to create some exciting opportunities. Here are a few key factors you need to be aware of.
The Overall Market Is Predicted to Slow
Over the past few years, the markets have been hot, with low inventory and high demand fueling record home prices. But that's changing. In 2022, the median number of days on the market was 31, a 13-day year-over-year increase. This was an early sign that the housing market was starting to slow down.
In January 2023, median home prices were up 4.4% year-over-year. But, the average number of homes sold was down 26.35%, and the median number of days on the market was 49 — an 18-day year-over-year increase.
High mortgage rates have slowed demand and brought home prices down from their summer 2022 peak. People also aren’t buying as quickly as they used to. Now that the frenzy has slowed, consumers tend to be more demanding about the homes they purchase. Buyers now have more time to consider their options and know they are less likely to end up in a bidding war, even when they’re shopping in hot markets.
Affordable Neighborhoods Offer the Most Opportunity
Despite factors pointing to a market slowdown, the desire to move to North Carolina hasn’t gone away. In fact, Zillow predicted that Charlotte will be the hottest real estate market in the country in 2023. In general, markets that are relatively affordable and have room to grow are poised to stand out. This is particularly true now that so many people are working remotely. Areas that are further away from big cities are more attractive than they used to be.
Mortgage Interest Rates Will Continue to Impact Demand
In late 2022, mortgage interest rates skyrocketed past 7% and are predicted to remain high at least during the first half of 2023. However, some experts predict that rates may drop in the third and fourth quarters of the year. If they do fall back down closer to 5%, this may trigger a small boom that will re-inspire demand and increase overall sales.
It’s also notable that sales in the luxury market may be less influenced by mortgage rates. There are typically fewer concessions and more price negotiations with properties over $1 million. This may create opportunities for real estate professionals focusing on higher-priced homes, even in a cooling market.
How to Capitalize on These Trends
Agents should be prepared to spend more time with their clients to help them explore multiple properties. Developing personal relationships with your clients can earn you a reputation as a patient and experienced real estate professional. And that might help you gain future referrals.
You should also consider identifying attractive and affordable neighborhoods in your region. Being an expert in desirable areas gives you a step up on your competition.
Finally, while you can’t control mortgage interest rates, you can pay close attention to trends. If possible, shift your business focus to take advantage of them.
Despite the changes in the market, there are still plenty of opportunities for North Carolina real estate agents to thrive in 2023. Whether you’re a fairly new real estate agent or an experienced professional, now is a great time to sharpen your skills. Our real estate training courses will help you set yourself up for success in any type of market. Start exploring your options today.
Updated 04/07/23