As 2023 springs forward in full force, it is important to consider how the pandemic has changed industries including real estate, establishing a before and after COVID-19.
At the beginning of the pandemic, the context we were living in caused the residential real estate market to top-increase an average 33% around the country. Moreover, building sales and new construction initially stalled in the face of economic uncertainty. Soon after when the stock market started to stabilize, housing prices picked up. But things are very different now.
Manuel Molinos, an expert realtor based in Ocala, Florida, recently shared his analysis on the impact of the pandemic on the real estate market and presented some of his predictions for the industry in 2023.
“During the covid market, properties went up over those 2 years about the same as they had gone up in a 10-year period.” Molinos explains, and adds “With record low interest rates, families feeling cramped after a year of sheltering in place, and supply chain issues worsening our housing stock shortage, we were dealing with an extraordinarily hot housing market.”
At the time, sellers took advantage of the market and, of course, set high prices for their properties. But two years later, entering the post-covid market era, sellers can no longer do the same to their property prices. Buyers will no longer pay those rates, interest rates went up and supply and demand stabilized.
But that does not mean that the outlook for real estate is negative. In fact, Manuel’s predictions for 2023 are optimistic.
“First time home buyers are going to have a better opportunity to buy a property, after two years of a fairly competitive and overpriced market. Currently, there is much more inventory on the market, which means less competition and more opportunities for buyers.” Manuel comments.
Many of these first time home buyers are millennials. This group of people represent a large percentage of the population, have a stable income and, in general, higher savings. In fact, a survey from Bank of America shows that 67% of millennials are “likely” to buy a house in the next two years.
Additionally, many of these millennials are women, according to an extensive analysis by LendingTree. The analysis shows that in 2023 single women are more likely to own a home than single men in 48 states. In fact, women will own 10.76 million houses, and men 8.12 million.
Manuel also expects the market to stabilize this year and give rise to a “healthy real estate market”, where healthy means “similar to the pre-covid era.” Also, property values will stabilize as the market gradually corrects itself.
“The market will continue to grow and expand, and the demand for housing in urban areas will increase. Millennials will continue to take over the market. We will also see more affordable housing options”, Manuel states.
This year it is also expected that low mortgage interest rates will continue and that the construction of single-family homes will increase by 5%, which has been ratified by the National Association of Home Builders.
That is why Manuel believes that without a doubt, 2023 is a good year to invest in property, and why he is expecting many new clients.
Manuel is dedicated to helping his extensive clientele to sell their properties, to buy their dream homes and to invest in Ocala. He provides different types of services to make sure he meets the needs of all his customers.