2023 Housing Market Predictions for Hampton Roads
After the wild housing market trends of the last few years, real estate buyers and sellers are keen to know what is in store for 2023. Will mortgage interest rates continue to rise next year? Will the Hampton Roads housing market crash in 2023? Will we finally see a buyer’s market or another seller’s market? Read on to discover our real estate experts’ forecast for next year in Virginia Beach and neighboring cities.
Hampton Roads Housing Market Crash Prediction 2023
What we hope to see and forecast that we’ll see: We took a detailed look at this question in our recent 2022 Hampton Roads Housing Market Review, but the short answer is this: it’s much more likely that we will see a housing correction in Hampton Roads in 2023 than a crash. This is ideal, because it means home values will remain strong while the market is on its way back to a pre-pandemic normal.
Mortgage Interest Rate Forecast for 2023
What we want to see: After hitting record lows during the pandemic, mortgage interest rates shot up in 2022. While still historically lower than much of what we’ve seen in the past 30 years, the sharp rise in mortgage rates has started to price many buyers out of the market. Potential sellers have been rethinking whether moving to a new home is a better choice than keeping their current mortgage. We’d like rates settle and become more predictable so buyers and sellers can make wise decisions with confidence.
What we predict we’ll see: By the end of 2023, we forecast that average mortgage rates should settle to under 6%, but the effects of a higher rate environment will still affect the Hampton Roads housing market. When rates stabilize, the market will be able to adjust to the new reality– a key step toward a healthier real estate market.
Housing Prices Prediction for 2023
What we want to see: With housing affordability at an all-time low, we have seen many buyers who need housing be unable to find what they are looking for. We want to see a mild correction in housing prices bring much-needed relief for buyers.
What we forecast we’ll see: Will housing prices soon go down? While many have feared that the Hampton Roads housing market will crash and home values plummet, the current setup of the market (still-strong demand and record-low supply) indicates that won’t be the case. Home price appreciation will slow in 2023, but don’t expect the price of homes to crash.
Quick Note: What about rent prices? We also expect average rent prices to decrease in 2023. Rental supply increased during the latter half of 2022 in Hampton Roads, which will help to push rates back down. The sky-high rents of the pandemic have made many tenants unable or unwilling to afford housing in certain areas – so even though we don’t anticipate rent going back down to 2019 prices, review your potential business plan if you own or are considering purchasing a buy and hold property. Be conservative with your rent projections for the next few years.
Home Sales Forecast in Hampton Roads for 2023
What we forecast we’ll see: With demand hampered by interest rates and scant home listings on the market, we anticipate total number of homes sold in 2023 to drop by 5-8% in Virginia Beach compared to 2022. That said, we recognize that stabilizing mortgage rates could bring back that sense of normality buyers are waiting for, leading to a rebound in demand that could sink this particular prediction.
Virginia Beach Housing Inventory Predictions for 2023
What we want to see: As we’ve said before, what we’d really love to see for the benefit of both buyers and sellers is a return to a “normal” housing market, which relies heavy on returning to healthy inventory levels. That would ideally be at least three months of active supply available.
What we forecast we’ll see: The growth will be slow, but supply should increase throughout 2023 as less homes are sold than in 2022. We predict that we will at least see two months’ supply of listings on the Hampton Roads housing markets by the end of the year.
Quick Note: Does more inventory mean my home value will plummet? Likely not. We need more inventory to have a healthy housing market in Hampton Roads that supports home value. By no means does an increase in inventory lend itself to a massive fallout in home values.
Should I buy a home in 2023?
These housing market trends and predictions may seem a bit exasperating for homebuyers, but there is hope in 2023. Rising interest rates have cooled off demand, and while sellers are still looking for a strong offer, many are willing to make concessions on things like closing costs and certain home sale contingencies.
The expected slow down of competition should lead to houses remaining on the market longer, allowing buyers more time to analyze and process before deciding to make an offer. Savvy investors will once again be able to negotiate with sellers on overpriced or poor-condition homes - so make sure you know how to make a reasonable offer.
Cash is still king in 2023. If you can put cash toward a house to offset the higher interest rates, now could be a great time for you to purchase the shelter you need. Until housing inventory hits a 3-6 months of supply, homebuying will still present the unique set of challenges - which you’ll want a real estate expert you can trust helping you navigate.
Should I sell a home in 2023?
Even as the Hampton Roads housing market slows down in 2023, demand will remain strong. It’s still prime time to sell your home if you’re able – there are more eligible homebuyers watching the market now than there have been in decades. There are a few key elements that will be crucial for a successful home sale.
Careful presentation, accurate pricing, and the location of your property will be vital for sellers. Showing that your home is in good condition will help catch the eye of buyers and reassure them that it’s a good purchase. Multiple offer situations are lessening, so price your home correctly from the start. And while you can’t do much about the location of your home, using a local expert to market your home can help you get top dollar quickly.
Matching price with location and condition will be crucial to selling a home quickly and at top dollar. Those who overprice or under-present may find themselves needing to cut their list price down, wait for new interest, and provide larger concessions to win over a buyer.
The Bottom Line
As our experts look at the housing market trends, we created this 2023 Hampton Roads housing market forecast to help you be successful with your real estate needs in the coming year. The market will continue to cool over time and prices will plateau for a while. The 2023 real estate industry in Virginia Beach will remain competitive, though the pace of the market will settle across the board.
The team at CGP Real Estate with Broadsight Realty in Virginia Beach, VA is ready to serve all of your housing needs in 2023. Don't wait, reach out today!