Real estate industry trends you need to know for 2023

For more than 40 years, the Urban Land Institute (ULI) and PWC have jointly produced the Emerging Trends in Real Estate study, which has become the standard for reporting on the industry’s future.

Looking ahead and assessing trends are more crucial than ever, especially in light of the market turbulence that has occurred in the years since the COVID-19 outbreak. We dug through the research to provide you the highlights and facts you simply can’t miss that will affect your company in 2023.

Real estate was moving at a record-breaking rate in 2021 and for a portion of this year. Homes were selling fast, for more than asking, and in cash. But in 2023, the market’s growth rate is likely to continue the slowdown that began in late 2022.

The number of days a home spends on the market will keep rising, there might be more price haggling even though the average home price is anticipated to stay high at 30% more than in 2019 and before, and rising interest rates will keep some buyers on the fence.

Numerous aspects of the industry are impacted by remote employment.

Both the business and residential real estate sectors are impacted by the continued use of remote labor. Businesses that continue to operate remotely might give up their empty office space or downsize, leaving substantial portions of commercial buildings vacant for future use.

When it comes to housing, employees who work from home may relocate and search for larger homes with separate office spaces. In an effort to save money on their electric or internet bills even though they spend more time at home, they might also give preference to ecologically friendly residences. According to the survey, fewer than half of the workforce spends the entire workweek in an office.

While it might not be immediately clear how climate change affects real estate, there is really no factor that has more of an impact than the environment. Extreme weather and climate-related events are frequent occurrences.

Flooding, fires, storms, tornadoes, and other natural disasters are examples of extreme weather. Homebuyers are increasingly avoiding regions of the country that put them in danger.

People don’t want to pay for high-risk insurance or energy prices, nor do they want to live in a high-risk location. In order to safeguard their homes against storms, homeowners in Florida and other low-lying locations must purchase flood insurance. Additionally, households in Arizona and other desert regions pay exorbitant utility rates to stay cool throughout the summer. A rise in out-of-state purchasers looking for a more stable environment will be observed in temperate and low-risk areas through the year 2023 and beyond.

The top markets to watch for real estate growth were also listed in this year’s survey. the following cities:

Nashville
Dallas – Fort Worth
Atlanta
Austin
Tampa
Raleigh
Miami
Boston
Phoenix
Charlotte

The location of these well-known cities is just one of many noteworthy qualities; almost every city on this list is in the Sun Belt. New York, Chicago, and Los Angeles are conspicuously absent from this list of cities, demonstrating that the trend toward mid-sized, more reasonably priced cities will persist until 2023.

However, the increase in commercial and residential activity in these locations could upset the established market trends in these cities. They will face rising costs, shifting demographics, and new infrastructure.

All members of the housing business will face challenges in 2023, but real estate brokers can weather the storm and emerge stronger by keeping an eye on emerging trends, adopting a flexible mindset, and being open to adaptation.

You can read the full report here.