While owning a house is a dream come true for many, the actual market conditions are not affordable to all. Thus, many people are forced to rent despite their wish to own their own homes. We discussed the pros and cons of buying vs. renting a home, so as an experienced real estate agent, here I’ll discuss the 2023 macro real estate trends that may affect the decision to buy or rent.
Inflation and Cost-Of-Living Expenses
The global challenges we faced in the past few years have brought a rise in living costs and affected inflation. In turn, this has affected all areas of life, and it looks like it will continue to grow in 2023. These factors will probably influence how people approach their living situation, and many will possibly choose to live with roommates or relatives to cut on rent and utilities.
However, as more and more people work from home, many could be forced to look for larger units, leaving studios and one-bedroom apartments sitting longer. Also, we are seeing a prominent trend of millennials and Gen Z people entering the housing market, who have different preferences than their parents, so there is no saying how this trend will conclude.
People Are Still Transitioning to Suburbs
Another trend I must mention is the trend of people moving away from large cities to the suburbs and smaller towns. This was at its strongest during Covid, but the work-from-home trend will continue, which will most probably slow down the real estate market in densely populated cities and spark it up in the suburbs. We still talk to buyers for our Fraser Valley listing that want to move to the suburbs, and just live near the highway or future sky train lines to keep the door open for occasional travel into their urban offices.
Inflations impact on mortgage rates
Buyers are sensitive to interest rates as it impacts their payments. Rates coming down strongly depends on the inflation level, and it seems inflation has peaked and is starting to come down (were already down about 2 percent from the peak). Ideally inflation will get back towards the Bank of Canadas 2-3% target towards the end of this year. The moment the inflation loosens, people will start feeling more confident in taking loans or mortgages, so we can expect a rise in buyer demands throughout 2023, and many agents are already noticing a slight uptick now.
Please note that these are just my views on the possible market trends in 2023 based on my experience, expertise, and market knowledge. No matter how the real estate trends in 2023 continue, I’ll be here for you, whether you want to buy or rent your new home. Please get in touch with me if you wish to purchase or rent a home in the Fraser Valley.