2023 Maryland Real Estate Forecast
Nick Keller, Greg Brock here once again to talk about, as we like to do at the top of the year, what's going to happen here in 2023. A little bit of a prediction and a little bit of a look back. We'll talk a little bit about what we're hearing, seeing, what remains fact, and how that impacts you as a consumer.
Last year was a pretty back and forth. We saw interest rates double, more than double throughout the course of the year. They did slightly stabilize towards the end of the year. Keep in mind all of this is going to hinge around inflation. That's why we're seeing what we're seeing.That's why we're seeing the volatility across the economy, but it's also in the real estate industry. So with mortgage rates, they did double last year. The Mortgage Bankers Association is actually forecasting interest rates to drop this year. The key thing to watch is inflation reports, which come out monthly and then the subsequent treasury markets.
We actually saw interest rates come back some at the end of 2022, which based on inflation. So if you were paying attention, the last two months of the year saw stabilized inflation reports both in November and December. And as a result we saw interest rates drop a little bit. The Mortgage Bankers Association, a lot of experts are predicting that to happen as we go through into 2023, which will help home affordability in Maryland.
But what it really comes down to is supply and demand...
2023 Housing Supply
Prices, just like anything that's being sold comes down to supply and demand. This is fact. Every expert across the board says the same thing, that the supply is not going to change. Too much inventory across the country here, and locally in Maryland and southern PA isn't going to get any better. New construction has slowed down. The incentive for home sellers to sell their houses right now has slowed down because interest rates are higher.
2023 Housing Demand
Demand is down a little and the economy's topsy turvy. So there's some psychological impact to that. So home inventory in Maryland and southern PA is not expected to go up this year. The wild card here is what's going to happen with demand, which is going to hinge around that interest rate. A lot of real estate experts are predicting a 10 to 20% drop in prices. Real estate is very area specific here in the Maryland Southern PA area. I think we're going to see more of a deceleration in home prices, not a differentiation. And a lot of that hinges around the job market, which is super tight around this area, and nationally, for that matter.
Also, keep in mind that were up 39% in home prices since January of 2020. So even if they pull back some, they're still way up over where they've gone in the last two years. But I do expect that in 2023 that we will see more of a deceleration than we will depreciation.
At the end of the day, what does this mean for you?
The conditions are the conditions, right. We're not changing them. So the best thing we can do is;
1. Deal with the conditions we have
2. Position you as best we can
3. Give you as much information as we can for YOU to make the best decision
All the predictions in the world aren't going to change anything. At the end of the day, it's important to know what the conditions are and then come up with a game plan for buying or selling your next home. It's really integral right now to come up with a game plan so that you can make the best decisions based off the right information and the right perspectives. That's the best thing you can do if you're thinking of getting in the market.
So that being said, if you're thinking about even just possibly dipping your toe into the market in 2023, now is the time to speak with the real estate professional, your mortgage lender, and talk about making a plan for 2023.
If we can help with any questions or if you want to see any topics covered in future videos, let us know. We appreciate you stopping by. We look forward to seeing you next time.