SCOTTSDALE, Ariz.--(BUSINESS WIRE)--HomeLight, the real estate technology platform helping top real estate agents and their clients compete and win, is publishing its Top Agent Insights Report for New Year 2023, featuring findings from a survey of over 1,000 of the top real estate agents across the country. The report highlights how buyers and sellers – in response to the market’s affordability crunch and economic uncertainty – are adapting their expectations and behaviors.
The first half of 2023 for the U.S. housing market continues to present challenges for home buyers and sellers driven by another expected interest rate hike, a weakening job market, and slow home price movement. In response, two segments of buyers will change their behavior meaningfully: retirees and first-time homebuyers.
Retirees are deviating away from their original moving plans to combat inflation and housing affordability
Retirees are particularly sensitive to inflation as it erodes their spending power with age.
According to the report, agents are predicting the following entering the new year:
- 59% of retirees will delay plans to sell or remain in their current homes
- 55% of retirees will look to sell while downsizing
- 42% of retirees will change where they plan to retire due to higher costs
- 39% of retirees will adapt their homes to age in place
- Nearly a quarter (22%) of retirees will adapt their homes to invite their children and/or grandchildren to live with them — both to save money and help their kids save money to eventually purchase their own home
First-time homebuyers feel a sense of desperation as affordability challenges mount
The emerging challenges ahead and beyond the 2023 market will broadly impact the lives of first-time homebuyers.
Top real estate agents predict first-time buyers will adapt to the market in 2023 in the following ways:
- 67% will explore more affordable areas
- 54% will increasingly use rate buy-downs to secure a lower interest rate
- 45% will look for smaller or older homes
“Gen Z will continue to rent as interest rates and home prices strain purchasing power,” said HomeLight Elite agent Mike Chou of Los Angeles, California. “Retirees may sell to cash out and move out of state or travel. Retirees may also expand their homes for kids to move back in, helping them to save money to purchase in the future. Millennials should be the largest group of purchasers.”
Move-up single-family homes and new construction inventory will unlock first in 2023
Top agents are forecasting that certain classes of homes will see disproportionately higher inventory during the market slowdown. Given elevated mortgage interest rates, some buyers are naturally downsizing their expectations, while others will actually use this opportunity to jump in head first.
Nearly half of top agents (48%) are predicting larger or move-up single-family homes will unlock first in 2023, followed by new construction homes (37%), allowing older millennials and growing families to finally get a foot in the door after months of uncertainty. Over a third (36%) of top agents predict that starter homes will become more available in the new year — but affordability will still prevent first-time buyers from taking advantage.
How sellers compete in a difficult market: Bright kitchens and luxurious bathrooms
As many of today’s buyers are now setting their sights on move-in ready homes, renovations will play an important role for prospective sellers in the new year. There are two essential rooms sellers should be focusing on when approaching home improvement projects: the kitchen and bathroom.
Keeping up with what prospective buyers gravitate towards when it comes to their kitchens can be overwhelming, especially when the latest design trends are constantly changing. But agents anticipate buyers will be drawn to a much simpler trend in 2023 – over 84% of agents reported that buyers still prefer to see light and white color schemes in the kitchen.
Bathrooms that are both modern and functional with spa-like qualities are likely to help a house sell in 2023, with 64% of agents saying a double-sink vanity will be the single most popular feature.
Overall, HomeLight top agents report that 2023 may be an arduous year for some buyers and sellers, but keeping up-to-date with the latest trends, working closely with a top real estate agent, and maintaining a willingness to adjust, will help those looking to buy or sell reap the benefits.
For all findings, download the full report.
HomeLight’s Top Agent Insights Report for New Year 2023 was fielded between October 29 through November 9, 2022 in an online poll of 1,031 top real estate agents across the country. Agents were selected to participate in the survey based on the same performance data HomeLight uses to identify top real estate agents for over a million homebuyers and sellers nationwide.
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For additional information and images: homelight.com/press