Happy New Year, Substack subscribers! We’re starting 2023 off with a new format! Twice a month I’ll round-up the best real estate articles and break them down for you in an easy to digest format to help keep you informed. Here’s what we’ve got for this week:
The Article: Fortune: Something Big is Happening in the U.S. Housing Market—Here’s Where 27 Leading Research Firms Think It’ll Take Home Prices in 2023
The Highlights: This article asks 27 organizations, from NAR to Goldman Sachs, for their 2023 home price predictions. 23/27 of the research firms think home prices will be down in 2023.
My Take: I agree with the 23 firms on this one! But, with that said, supply is still so low that there’s absolutely no room for a housing crash. I predict housing prices will be down by 2%-7% from 2022, but nowhere close to 2008-2009 when they were down between 25%-30%.
One caution when reading articles like this! You’ll notice these firms aren’t all making apples to apples comparisons when making their projections. Some are comparing peak 2022 numbers to where we’re at now, some are using a rolling 12-month average, etc. Just be sure you know what you’re looking at before you draw your own conclusions.
The Article: Mortgage News Daily: Lowest Rates in 4 Months After Inflation Data
The Highlights: Yesterday the latest CPI report was released, and we met expectations across the board. Year-over-year inflation is now at 6.5%--down from 7.1% last month. Fuel was down the most contributing to the positive outcome. This makes 3 months in a row of meeting or beating expectations
My Take: I think this positive downward momentum will positively impact mortgage rates as we enter into the busy spring season. The rates we’re seeing now are probably the highest we’ll see this year, barring some unexpected shift. If we continue on this trajectory and rates dip into the 5% range, I expect this will cause buyers and sellers alike to get active in the market.
The spread between people’s current mortgage rates (say around 3%) to 6.5%-7% in the fall was too large of a spread to be motivating, but 5% is a much more manageable increase.
The Article: Houzz: Most Homeowners Will Continue with Their 2023 Remodeling Plans
The Highlights: A survey conducted in the fall of 2022 revealed that 67% of homeowners will opt to renovate their current home instead of moving in 2023. After an uber-competitive housing market last year, many homeowners have leaned into staying put instead of moving. Additionally, more than half of the homeowners surveyed said they have no intention of selling or moving out of their current residences in the next 20 years — or ever!
The top 3 most popular home improvement projects homeowners say they’ll be investing in this year include bathrooms and kitchens.
My Take: With the Covid supply chain issues (mostly) behind us, I think people are more eager than ever to improve their homes and complete long-awaited projects. However, with rates looking to be more reasonable this spring, I suspect people who previously settled on staying put will resolve to move instead.
That said, whenever tackling a home project, look for improvements that build equity. Before you dig in, consider what’s worthwhile to upgrade, how long you plan to stay in your home, what issues you should address immediately, and which projects you can DIY and which you should leave to a pro.
Social Spotlight
Here are our three most-loved posts on social this week! While you’re checking these out, be sure to follow along so you don’t miss a thing!
Check out this community feature! If you’re looking to relocate to the western suburbs, Wheaton is an amazing place to call home.
We’re not Hollywood, but even the Chicago ‘burbs get their time to shine! Did you know parts of this movie were filmed at Cantigny?
From tiny houses to airplanes—people can make a home anywhere! Check out this wild story.