Watch and learn Brian Icenhower's 2023 real estate market predictions for annual sales volume, total home sales, and other key housing statistics in this forecast.
Real estate market predictions can be valuable, insightful pieces of information that will help you grow your business despite market challenges. That’s what I hope to provide you with today.
I’m going to share my expectations, based on decades of knowledge and training, as well as my insight on how real estate agents can use this knowledge to their advantage in 2023.
VIDEO: Brian Icenhower’s 2023 Real Estate Market Predictions
Real estate market predictions: a tale of 2 markets
When you hear people talk about the real estate market, you need to realize that there are two “real estate markets.”
- Real estate sales. Generally speaking, the only person who cares about real estate sales are agents. The public doesn’t care. Friends who aren’t agents don’t care about how sales are doing.
- Real estate prices. This is the market that the general public does care about. They care about housing prices going up or down.
Real estate market predictions: pay attention to terminology
Pay attention to whether a stat is “month over month” or “year over year.” The real estate market is seasonal, so year over year stats can give a better picture of the general health of the current market.
As real estate agents, you take these real estate market predictions and you become counselors to our clients. You need to be knowledgeable about the two “real estate markets” and the terminology in market updates so that you can educate your clients on the truth.
Your clients depend on you to be the expert. Remember that!
Annual Home Sales: the big picture
Check out this graphic. It shows the number of homes sold in the United States. You can see the drop from 2021 to 2022. That’s intense.
You’re talking almost 2/3 of the home sales for a real estate agent last year. Real estate agents get paid based on home sales. So, that means 2/3 of the commission was earned by real estate agents last year. That is almost entirely due to rapidly increasing interest rates like we haven’t seen since the early 1980s.
However, this is not reflective of what we saw in home prices. Yes, we did see some month-over-month decreases in home prices. But that is largely seasonal, and something you can come to expect every winter. A lot of people saw this decrease in average home prices of houses sold and thought that home prices were dropping in general.
We coach many of the highest producing agents and teams across North America. We have coaches and clients everywhere. There is no inventory. When there isn’t inventory, you can pretty much count on prices to go up. It’s all about supply and demand. Supply side economics will teach you that yes, buyer demand is important, but supply is running the ship. As long as supply is low, prices will continue to rise.
Real estate market predictions: Messaging to your clients
It’s important to consider how to provide insightful and impactful real estate market predictions to your clients. How do you get that message out?
I would say that it’s not so important what the message is — it’s more about the contact in general. You need to be out there and contacting your database consistently. You need to be there for them and available for their questions.
The market is conditioning your clients. You don’t need to tell them what the rates are. Everyone knows. What they don’t know is that supply is low and it’s a great time to buy or sell.
What you should be doing is showing more than telling.
I’m going to share with you a graphic that you should be showing all of your clients right now. When you are providing your clients with your real estate market predictions, show them the graphic below. (Also, you can download a high res copy of the graphic below for FREE by subscribing today. Scroll down to subscribe!)
Median Sales Price of Houses Sold
The green line on the graphic above shows you how home prices have changed over the course of the last 70 years. You can see from this zoomed-out view that home prices have been steadily increasing for a long time.
You can easily see where there was a recession, and that was due to an overabundance of supply. It wasn’t because of a lack of demand, it was because too many homes were being built. There are a lot of things that contributed to that recession, but you can see that there was a price drop on the graph.
That being said, it didn’t take long for everything to “reset” and for housing prices to get back on track and continue increasing.
Some people saw a price drop in their local market in the second half of 2022. Understand that if you compare home prices in 2021 to 2022, home prices did increase 5.6%.
There are all kinds of small bumps up and down on this graph. But they are tiny. And, home prices self-correct and get back on track pretty quickly. Why? Demand. Demand is increasing, and supply can’t keep up.
Real estate market predictions: trying to “time” the market
There isn’t any expert out there giving real estate market predictions that prices will not continue to climb, as exemplified in this graph.
The takeaway for your clients? Anyone waiting to try to “time the market” is crazy.
“Timing the market” is especially crazy if you are buying and selling your personal residence. I say this phrase often when it comes to buying and selling a personal residence: it all comes out in the wash.
Let’s say your client is waiting for prices to drop so they can buy low. Well, they will also sell their current home low, too.
And when it comes to mortgage rates, clients can always refinance when the rates do go back down. There is no reason to wait for mortgage rates to go down!
Real estate market predictions: There are still not enough houses
As long as there are not enough houses being built, supply will still be low, which will continue to drive prices up. In terms of real estate market predictions, this one is pretty straightforward. There will still be over-asking offers and bidding wars, multiple offers, and highly competitive situations for buyers and sellers in 2023. That isn’t going to change anytime soon.
Agents need to put their blinders on, like a racehorse who needs to focus on the race and not the surrounding horses. Don’t worry about the clickbait. Don’t concern yourself with the media fear frenzy. Focus on staying in contact with your people!
Real estate market predictions: 2023 home sales
In 2022, we saw 4.4 million home sales. I don’t think we will be much higher than that in 2023.
The real question on my mind is when the market will go really crazy again.
Realize that in 2022, the year started off with a crazy bang. So we are going to see some negative data come out about 2023 because it isn’t on track with how crazy 2022 was early in the year.
So that remains to be seen. The consumer confidence will come back, and it may be soon, or it may take some time. It could happen in spring but it could wait until summer.
I do think we will see an uptick this year. And, I expect that we’ll see it continue on an upward trajectory. People will start to realize that housing prices are not going to drop. Investors are back to buying. The world isn’t ending. The Federal Reserve is cutting back on rate increases for now.
When that chain reaction starts to happen, and I do think it could happen in the next several months, I would estimate around 5.25 million homes sold this year.
FREE DOWNLOAD: Median Sales Price of Houses Sold Graphic
Today, we are giving subscribers a free copy of the powerful graphic we covered in this blog. This graphic is great to show your clients if they have any urgency objections or are waiting to “time the market.”
Want to learn more?
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