The median home price in Washington, DC is $475,000 in January 2023.

This is up by just 0.5% from this time last year. However, it’s notable to keep in mind that the median home price is down around 3% from December 2022. This is a clear indication that the Washington DC housing market is cooling off.

The entire Washington DC real estate market experienced a boom in the last few years. This ensured massive gains for property investors in the region. If you take a look back at the median home price in 2020, you’ll find that the price is under $400,000.

Prices continued to rise in 2021 but reached a peak in the first half of 2022. Home prices in the region have steadily been on the decline ever since. This is why real estate investors are thinking about selling their property before prices fall any further.

A similar trend is appearing in the Arlington, VA housing market. Could this be a clear sign that it’s time to sell? While it’s important to keep an eye on the data, there are additional insights that you should take into consideration before making any big decisions.

This will help you understand the current state of the housing market so that you can make more informed decisions for your portfolio.

Continue reading to see what these three insightful housing reports have to say about the future of the housing market in this region.

1. Housing market cools down at the beginning of the year

The beginning of 2023 saw the housing market in Washington DC fall by 3%. While prices are still up slightly since January 2022, the trend is clear.

Paige Hopkins did a deep dive on this for Axios and noted that the interest rate is the leading cause of home prices cooling off. This puts both sellers and buyers on the same playing field.

Higher interest rates mean there’s less competition in the housing market. Since there are fewer buyers, sellers may have to drop their prices to find a buyer for their property. Sellers are forced to drop their prices if they want to remain competitive in the market.

Many signal that this is a transition from a seller’s market to a buyer’s market. As home prices cool off, Axios predicts that more homes will come on the market soon. This is because real estate investors will want to sell their homes now to secure pandemic profits.

Jeff Clabaugh wrote for wtop news and noted that home prices may stabilize this year in the DC area. This is primarily due to the fact that interest rates don’t seem to be going up anytime soon. This encourages people to hold onto their homes and enjoy a conservative 1% gain for the year.

While a 1% gain may have been impressive in the past, the real estate market in DC has grown used to much more impressive gains. This is why the median home price shot up from under $400,000 in 2021 to over $550,000 in the middle of 2022.

2. New construction might revive city’s population

When it comes to the demand for housing, the population of a city is the most important figure to keep an eye on. This is why the Mayor of Washington DC plans to boost the population within the metro.

In simple terms, if there are more people in DC, more people will need to look for housing. This means that there are more buyers in the market. This also means that real estate investors will enter the market to buy property and rent it out to people moving to Washington DC.

Either way, a rising population is bound to make home prices rise. The Mayor of Washington has announced an initiative to bring people to DC. This was outlined by Cuneyt Dil and Paige Hopkins for Axios.

This plan includes converting office buildings into new apartments. The entire investment is not just to add more real estate to the market as it plans to create additional jobs in the region. It’s important to remember that Metro doesn’t plan to covert office buildings themselves, but would rather launch incentives for real estate companies to do this.

This will repurpose office space that’s not being used in the area. Additionally, this will encourage additional investment in the city itself. More people means more stores, shops, malls, and schools.

Hope Hodge Seck also wrote about this trend for the Washington Post. Here, she outlined how reinventing buildings and spaces can help encourage investment in the area. This is the approach that seems to be working all around the world.

New buildings

Private companies are also looking to invest in the region. Amazon is one of the biggest investors as they’re looking to open a 22-story building in Pentagon City. Cuneyt Dil noted that there are a number of developments that investors should keep an eye on in the area.

These new buildings offer a unique opportunity for both buyers and sellers. If you own property in that area, you can sell it for a profit as new developments are planned to rise up. Investors can also double down in the area to expand their property portfolios.

This makes it a win-win situation for everyone in the region.

3. Office, the new future of housing

The Mayor of DC has noted that there are a few notable developments coming up in the region. These developments include housing but also incorporate economic development through new jobs.

The local government seeks to incentivize development in downtown DC through tax relief for real estate investors. This will help encourage investors to invest in all kinds of property and economic initiatives in the area. This is all in the hopes of creating a vibrant, 24/7 economy.

Offices to apartments

When it comes to creating space for these new developments, it seems like offices are going to be phased out. These office buildings are being converted into multifamily homes and apartments. It aims to redesign the entire downtown area so that the entire economy can benefit.

Keith Loria outlined this trend in the Commercial Observer. Turning office blocks into apartments is the most innovative post-pandemic idea. This is because offices have suffered and continue to suffer in the modern economy.

Since people moved to work from home, getting back into the office has been a struggle. The convenience of working from home is notable and resulted in businesses saving on their overheads.

This left much of downtown DC empty and unoccupied. Real estate companies that operated in the area took significant hits. This impact is still being felt by real estate investors in other markets as well.

The Alexandria housing market has also taken hits in the commercial sector. Converting these properties into residential housing repurposes the space. This helps make the most of the real estate that’s already there.

Key takeaways

All three housing reports conclude that the general economy is having an impact on home sales in Washington, Arlington, and Alexandria. There are a few common causes for this. The biggest factors include inflation and federal interest rates.

These interest rates have cooled off and there’s no clear sign that they will increase any further. This does give the impression that the housing market may stabilize in 2023. However, the effects of higher interest rates have made the cost of everything more expensive.

This means that the cost of living has increased all over the country. Even if interest rates remain the same, homes are still more expensive to finance today than in the last few years. Many experts agree that prices may rise again only when interest rates drop.

It’s not clear when interest rates may begin to drop. This is why real estate investors are considering selling their homes before prices fall any further. Whether you have a second home in the area or an entire portfolio of properties, it may be time to sell and lock in your profits.

The Washington DC housing market in 2023

When you take a closer look at these housing reports, you’ll notice that inflation and interest rates play a major role. Rising interest rates are making homeownership more expensive for the everyday person. The lack of buying pressure is causing home prices to fall.

If you’re looking to lock in your profits, now is the perfect time to sell. With the help of platforms like iBuyer.com, you can get a home valuation in the blink of an eye. Visit our website for more information on how we can help you sell your home.

The post The Washington-Arlington-Alexandria Housing Market in 2023 appeared first on iBuyer Blog.

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The Philadelphia housing market continues to feel the impact of the pandemic and a boom at the same time in home and rent prices.

Signs of growth in Philly are popping up, yet the housing market is showing signs of slowing and leveling prices.

What impacts the housing market and prices for Philadelphia real estate? How do the job market and the economy of Philadelphia impact the overall health of Philadelphia?

Read on to learn more.

Philadelphia’s recovering economy

In the article ,How Philadelphia’s Economy Is Recovering, the Pew Charitable Trusts took a close look at the economy of the city of Philadelphia. They look at five factors that are indicators of the health, or lack of health, of an economy.

They did this two years into the pandemic, which had a significant economic impact in cities across the US, including Philadelphia.

In their evaluation of the city, they used five questions. This helped shape the perspective on the city’s economic health. The questions centered around:

• Jobs
• Levels of remote work
• Size of the workforce
• Strength of the housing market
• Philadelphia’s implications for equitable recovery

As you’ll see, the report highlights some bright spots for the city. Yet Philadelphia still has areas where the city continues to face hardship.

Let’s look at the questions used to evaluate Philadelphia’s economy and what Pew Trust learned when asking them.

Philadelphia’s employment sector

The report began with the question of jobs in Philadelphia. While many areas evaluated in Philadelphia’s economic health looked promising, others seemed sluggish. The jobs sector remained mostly in that sluggish category.

They looked at the third quarter of 2021 through the same period in 2022 and found only limited job growth in the city. While the city gained 31,000 jobs, it does not have employment levels back to where they were before the pandemic.

This sluggish job recovery is consistent with what’s happening in other large Mid-Atlantic cities like Washington DC and New York.

Remote workers in the city

Next, the report looked at the levels of workers returning to their office locations versus those remaining as remote workers. Of course, when the city considers economic recovery, bringing workers back into the city is key.

It seems that some levels of remote work are here to stay for the near future, especially for white-collar jobs.

Researchers found that some workers were returning to their offices some of the time, but not on a permanent or full-time basis.

All the data considered shows a slight increase in in-office work and office space occupancy. Yet it still had not returned to pre-pandemic levels.

Research suggests the outlook for office and commercial real estate isn’t good. As leases expire, they aren’t likely to be renewed, with fewer workers coming into the city full-time to do their jobs.

City government revenue

The report found a bright spot when considering revenue for the city government.

Local taxes came in much higher in 2022 than in 2021. The city reported a fund balance of $775 million in June of 2022.

A few factors contributed to better city revenues, including better-than-expected economic activity. The city also has many unfulfilled positions, so they aren’t paying salaries and benefits.

Workforce

Another part of the report considered the size of the workforce in Philadelphia. Coming out of the pandemic, there was widespread concern about worker shortages.

Simply the number of people looking for work had decreased and was more prevalent in Philadelphia than in other areas of the country.

Concerns about the volume of the workforce have eased as time has gone on for Philadelphia. The workforce grew to 727,000 Philadelphians in the third quarter of 2022. This was up from 718,000 six months earlier.

City housing market

The housing market in Philadelphia, like many areas around the country, saw a rapid increase in both home prices and rent prices post-pandemic.

There was widespread concern that many felt city residences would be priced out of the real estate market if those increases continued.

The report suggests that the Philadelphia real estate market concerns are softening as the interest rate rise has slowed housing cost increases.

Research in the article cites the Zillow Observed Rent Index that rent prices in the last quarter of 2022 also leveled out.

Philadelphia suburbs

In the article, The Philly Suburbs Are Bigger Than Ever, Sandy Smith grapples with urban sprawl or, more specifically, the sprawl of suburban Philadelphia.

Anne Mosher has spent the brunt of her career studying urban historical geography. Her focus includes how cities and their suburbs have grown and competed for relevance and resources.

Philadelphia is no exception. Where suburbs used to be separate entities from the city, now you can move from the city to a suburb and not notice any definitive boundary.

Driving through one of the major highways in Philadelphia, the landscape looks much different than even a decade ago. What used to be farmland and cow pastures is now suburbia with house after house.

Towns like Allentown, Reading, and Lancaster used to be separate entities but are now interconnected because of the city’s massive growth.

She references how New York and Philadelphia used to be in close proximity but separate. Their individual growth now overlaps along the Delaware River in Trenton and parts of Bucks County.

Mosher even went back historically to the time of William Penn in 1682. Since then, she contends that Philly has been consistently spreading its tentacles with growth in all directions since then.

She suggests that this is what cities figured out to do early on. Lay claim to land around the central part of a city for trade, production, and growth.

Philadelphia, at its onset, needed more agricultural resources, which pushed its metropolitan expansion early on.

Philadelphia’s metropolitan expansion is driven by business development and population growth. Initially, though, business economics drove growth.

Companies look for lower-cost places for data centers, warehouses, and distribution facilities. Once these go in, the workers follow, and growth ensues.

Sandy Smith cites many developers for suburban Philadelphia, discussing exactly how the growth from Philadelphia has affected their growth and even blurred the suburban lines.

Areas that once focused on rural character are slowly shifting to a more suburban focus.

Now developers in these urban communities want to create unique living places and attract homebuyers to move outward.

Interestingly, the article addresses some of the differences between cities and those spreading from them. The area is more and more like one giant metropolis. This is especially true as New Yorkers move into Bucks County and beyond.

Development grants

In a press release from Pennsylvania Democrats, State Senator Sharif Street (Philadelphia-D) announces $4.5 million for infrastructure improvement and community development in North Philadelphia and the northern Senatorial District.

The Local Share Account (LSA) and Multimodal Transportation programs award the grant. It intends to invest in ways to make North Philadelphia a better place for all to live.

That might mean the grant money is used for medical equipment for improved health equity and monies to fight the growing opioid epidemic in these communities.

Monies were also set aside to improve transportation infrastructure in the area.

As a part of this grant, several specific projects received funding. The programs included:

• City of Philadelphia ($400K) for a playground
• Called to Serve CDC ($240K) for the renovation of the Zion Annex Building as part of the plan to create the Reverend Leon H. Sullivan Community Impact Center
• Nueva Esperanza Housing and Economic Development ($350K) for a mixed-use property
• Black Doctor’s Consortium (It Takes Philly: Encouraging and Empowering Our Children to Aim High) ($282K) for the purchase of radiology equipment
• Chipping Hill Micro Farms ($50,160) for an advanced learning center for young children
• The Behavioral Wellness Center ($100K) for the purchase of a recreational vehicle (RV)
• Philadelphia City Rowing ($171,535) for youth development rowing and competing programs for Philadelphia City public school students

This grant money is highly focused on programs that will impact the population of Nothern Philadelphia. The goal is those that will have an almost immediate impact.

Growth and growing pain in Philadelphia

Like many large American cities after the pandemic, some parts of Philadelphia show real promise while others remain stagnant or struggling.

This is good news for Philadelphia. The city itself is showing promising signs of recovery. The suburbs continue to sprawl and become almost interconnected with each other.

Investments in areas of the city struggling offer a chance to improve the lives of residents and children going forward.

The Philadelphia housing market in 2023

The Philadelphia housing market is evolving like that in many cities. In some ways, there is growth. In other ways, soaring Philadelphia home prices coming out of the pandemic continue to level out.

Philadelphia real estate across the greater Philadelphia area continues to be in demand.

If you live in Philly and hope to sell your home, we can help. Let us provide a home valuation for your home so you can achieve a quick sale. Check out our free home value estimator today.

The post The Philadelphia Housing Market in 2023: Here’s What 3 Reports Say appeared first on iBuyer Blog.

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Benefits of using an iBuyer include a fast and easy sale without the need for a realtor, no realtor fees, no home preparation and the ability to sell without listing the home on the market. Homeowners can also close on their own terms, making the process more convenient.

Disrupting the Traditional Model: Tracing the Origins of iBuying

The term iBuyer was coined by Stephen Kim, an equity research analyst at Evercore ISI (International Strategy & Investment) on May 29, 2017, in a report to clients titled “The Rise of the iBuyer.” In this report, Kim introduced the term “iBuyer” to describe companies and investors that use technology and data analysis to quickly make cash offers on homes with the intention of reselling them for a profit. The term “iBuyer” has since become widely used in the real estate industry to describe this type of business model.

Leveraging Data Analytics to Achieve Accurate Valuations 

Automated Valuation Models (AVMs) have been around since the late 1980s and early ‘90s, although they have become more widely used in the last decade with advancements in technology and data analysis. The first AVMs were developed by companies such as Freddie Mac and Fannie Mae to help them automate the mortgage underwriting process. 

Essentially, AVMs are computer algorithms that use data analytics and machine learning—taking into account a variety of factors such as the property’s location, size and recent sales prices of comparable properties—to arrive at a valuation. ATTOM AVM (attomdata.com) is a prime example. They play a critical role in the iBuyer market, where speed is often a critical factor in securing deals, because they can analyze a wide range of data points that help iBuyers quickly make informed decisions about which properties to buy and at what price.

“Currently, there are approximately 20 commercially available AVMs, and their unit costs range from about $1.50 to more than $12 per property valuation.”

— Mike Casale, Machine learning specialist

AVMs are not foolproof, however, and their accuracy can be impacted by a range of factors such as changes in the housing market or inaccurate data. To ensure the precision of their valuations, iBuyers typically use a range of methods in addition to AVMs, such as human appraisals and property inspections. These complementary methods can help iBuyers identify any potential issues with a property and provide a more comprehensive picture of its value, ensuring the likelihood of an accurate offer. 

Machine learning specialist, Mike Casale, made these seven points about the automated valuation models: 

1. There are different types of AVMs, including distressed, contemporaneous, lender-grade, marketing-grade, and others.
2. AVM reports can be used by a wide variety of individuals, including real estate lenders, real estate professionals, and government agencies, as well as individual researchers.
3. Currently, there are approximately 20 commercially available AVMs, and their unit costs range from about $1.50 to more than $12 per property valuation.
4. AVMs can be enhanced with assistance from local appraisers, which can improve accuracy, especially in more remote or rural areas.
5. AVMs fall short in some areas, including the quality of data used to generate estimates and the lack of innovation in the outputs delivered to customers.
6. AVM vendors can differentiate themselves by adding more value to the outputs they provide to customers, including reason codes, statistically derived confidence intervals, and explanations of the underlying data source used to generate the AVM estimates.
7. The regulatory environment for AVMs is currently under review, with a focus on streamlining and simplifying the process while still ensuring consistency with safe and sound banking and valuation practices.

Meeting iBuyer Demand: Companies See a Need, Strive to Fill It

In 2014, Keith Rabois—a venture capitalist, entrepreneur and former PayPal and Square executive—founded Opendoor, an online home buying company that allows homeowners to receive a cash offer on their home at a fair price with just a few clicks of a mouse. 

Within months the startup had raised $9.95 million, much of which came from fellow VCs and Silicon Valley A-list investors. Initially launched in Phoenix, Opendoor soon expanded into several other U.S. markets, including Portland and Dallas. The company charges a 5% commission or “convenience fee” and covers most closing costs, including half of the escrow charges. “If you are considering selling your home, we instantly provide an offer at a fair price and give homeowners the freedom to move on their timeline,” said Rabois in a statement around the time of the company’s launch. As of 2023, Opendoor operates in more than 50 markets across the country.

Real Estate Market’s Pandemic Challenges Affect iBuyers in 2022

The COVID-19 pandemic significantly impacted the housing market, leading to a surge in house flipping and residential real estate investing. According to real estate analytics firm CoreLogic, investors purchased a record high 28% of all single-family homes in Q1 2022.

The iBuyer trend was first initiated by Opendoor and its fast-following competitor Offerpad, and later it was adopted by major players in the real estate industry, such as Redfin and Zillow.

Zillow entered the iBuyer market in 2018 with the launch of Zillow Offers. The program allowed homeowners to receive cash offers from Zillow for their homes, with the option to sell directly to Zillow if they chose to accept the offer. Initially started in Phoenix, Zillow Offers rapidly expanded into other markets across the United States. In fact, it experienced such rapid growth that it overwhelmed the company and ultimately lead to its abrupt shutdown. 

In Q3 of its final year in operation, Zillow purchased more homes than in the previous 18 months combined, signifying the tremendous growth of the iBuyer business. By November 2021, however, Zillow announced that it would be exiting the iBuyer market after racking up over $1 billion in losses over the course of 3.5 years. This move was predicted to disrupt the iBuyer market and force other companies in the space to reevaluate their business models.

That prediction proved true when Redfin made the decision to shut down its RedfinNow iBuyer division in November 2021. This move reduced its workforce by 13% and impacted as many as 264 employees from RedfinNow, along with 218 additional jobs from other departments. The company’s decision to exit the space reflected the challenges and post-pandemic uncertainties the industry as a whole was facing. Both Zillow Offers and Redfin Now used AVMs to determine the value of homes and offer competitive prices to homeowners.

An article published by The Motley Fool in September 2022 claimed that the iBuying industry was facing significant challenges due to fluctuations in the housing market. Furthermore, Opendoor Technologies Inc. (Nasdaq: OPEN), which was previously regarded as the dominant iBuyer in the market, was facing losses similar to Zillow. According to a report by YipitData, Opendoor experienced losses of 42% on homes sold in August 2022. 

A closer look at the company’s year-end financials shows that Opendoor’s performance during the fourth quarter of 2022 was not as strong as it was during the same period in the previous year. In 4Q22, Opendoor reported revenues of $2.9 billion, reflecting a decline of 25% compared to the same quarter in 2021. Additionally, Opendoor’s sales figures for 4Q22 showed a decline of 23% from the previous year’s fourth quarter, with a total of 7,512 homes sold during this period.

Similarly, Offerpad Solutions Inc. (NYSE: OPAD) was facing challenges and not faring much better. Offerpad’s revenue declined by approximately 21.94% from the previous year’s fourth quarter, dropping from $867.5 million in 4Q21 to $677.2 million in 4Q22.

These figures have led to concerns about the future of not only Opendoor and Offerpad, but also the broader iBuying business model. Don Mullen, CEO of New York-based real estate investment firm Pretium Partners, has expressed concerns regarding the business models of both Opendoor and Offerpad. However, he was unequivocally bullish about the prospects of the single-family residential rental (SFR) industry.

Looking Ahead: What’s Next for iBuyers in 2023

The iBuyer model has emerged as a permanent fixture in the real estate industry. While many people associate iBuying with companies like Opendoor and Offerpad, it’s important to remember that other players, such as Tricon Residential Inc. (TSE: TCN) as well as the privately held Amherst Holdings and First Key Homes are also significant players in the space. These companies, with their focus on data analytics and technology-driven solutions, are poised to become major players in the iBuyer market in the years to come despite the challenges faced by others in the industry.

Fundamentally, iBuyer.com leverages its extensive technical expertise and well-established record of digital customer acquisition to connect individual homeowners with leading iBuyers (i.e., cash buyers) across the country, streamlining the home selling process for these homeowners and providing them with a fast and hassle-free option to sell their property. 

The post Underneath the Landscape of iBuying and What 2023 Holds appeared first on iBuyer Blog.

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The global real estate market reached a size of $3.69 trillion in 2021.

Real estate markets vary a lot depending on location. Anyone who’s considering buying or selling property should be up to date with the state of things in their area. This is because buying or selling at the wrong time could be a mistake financially.

For people living in Illinois, the Chicago housing market is one to keep an eye on. It can present a good place to invest, and knowing when to sell can help ensure you get the best price for your home.

Some things to consider are historical data, the situation in different neighborhoods, and investment factors. Having a good understanding of what you’re doing and what’s happening with the market will help you make the best decisions.

Various outlets provide information on the Chicago real estate market. Keeping up with the latest overview will give you an idea of what’s happening so that you can stay up-to-date and informed.

In this guide, we’re going to take a look at three reports that cover Chicago housing trends in 2023. This will allow you to determine what to do in terms of real estate investments over the next year.

To buy or not to buy? Looking toward Chicago’s housing market in 2023

Acacia Hernandez provided this report from WTTW, and one of the first things to note is that interest rates have more than doubled over the last year. There was a bit of a housing boom before the pandemic, but this has had a sizable impact on that.

Higher interest rates make it more expensive for people to buy homes. Depending on a person’s situation, it can be a better choice to try to wait things out. The issue here is that it’s hard to be certain when interest rates will drop again.

Some experts think that interest rates could even continue to go up. In this case, that would make now a better time to buy for Chicago residents that don’t want to wait too long to move.

Dennis Rodkin, a residential real estate reporter for Crain’s Chicago Business has made it clear that people don’t know what will happen with interest rates moving forward. While they’ve lowered slightly, the Federal Reserve thinks they might have gone down a bit too much. A continued increase in interest rates will most likely lead to a deeper freeze on the Chicago market.

What to expect

When the Chicago real estate market is doing well, there can be a lot of very quick sales (2 weeks or less on the market). Sales like this have almost completely disappeared. The reduced demand means that buyers have more control, so they can look at various properties without having to make immediate offers.

If you do decide to put your home on the market, you shouldn’t expect offers to flood in. While there are still people looking to buy Chicago homes, the process is a lot slower than usual.

Chicago home prices did rise during the pre-pandemic boom, although not as much as some other locations such as San Francisco and Phoenix. As such, the drop in demand is also not as significant as in these areas. They’re already seeing house prices fall, while they’re still on the rise in Chicago – though only by very small amounts.

Chicago remains one of the most affordable big cities in the country for housing. While things may not be too good going into 2023, it’s better here than in most of the rest of the US. It’s important to remember, however, that things can still change.

Chicago real estate market prices, trends, forecast

Home sales in the nine-county Chicago Metro Area reached 4,420 in January 2023. This is a 38.8% drop compared to the same time last year. The median house price, however, has had a slight increase of 0.7% over the same time frame.

There has been a slowdown in the market, but that’s typical of winter. Forecasts suggest that house sales and prices will likely increase over the next 3 months.

A buyer’s or seller’s market

This report written by Marco Santarelli of Norada Real Estate Investments is based only on single-family, condo, and townhome properties, and things are generally fairly balanced (supply and demand are very similar). In January 2023, the market favored buyers over sellers as there was a higher supply of homes, but the median price hasn’t changed much at all. This indicates that the housing boom is slowing down.

Rent prices vary across the state, with East Chicago being one of the most affordable areas. Even so, the average price of rent has increased by 17% over the last year.

Forecast for 2023-2024

The Chicago housing market will likely continue to be one of the best-performing markets in the country. The 1-year forecast suggests a slight decline (-0.8%) for the next year primarily due to less demand and higher interest rates. Demand is still quite strong, resulting in 28.7% of homes selling above the listing price.

As a place to invest, Chicago can still be a good choice. There’s a strong renter’s market, so if you want to buy a rental property you may find some good opportunities.

Over the past 10 years, Chicago has had an annual real estate appreciation rate of 4.88%. As such, it has consistently been one of the most successful real estate markets in the country. One thing to note is that the population has decreased recently, which could have a negative effect on the housing market.

House prices remain reasonable throughout the city. There’s also a good balance between renters as well as a reasonable spread of income levels. This can make it a good place to invest for anyone looking to get on the property ladder at any level.

Chicago real estate market trends to know

This report (published in April 2021) covers 7 specific trends in the Chicago real estate market. Devon Thorsby of U.S. News & World Report gives a good indicator of where things might be going.

Prices on the rise, but not unsteadily

In general, house prices went up from 2020 to 2021 (like most of the country) but not as much as in smaller metro areas. Chicago experienced a median price increase of 12.5% from February 2020 to February 2021. Even with the price increase, however, the number of homes sold over the same period was smaller.

Outside of downtown, buyer competition is fierce

The Covid-19 pandemic slowed things down for the market, especially in the Chicago metro area. Residential neighborhoods, however, experienced more competition.

This shows how much things can differ based on the neighborhood. When buying and selling, make sure you look into specific areas to see current market conditions.

High-rise buildings are seeing more vacancies

Another impact of the pandemic was the style of living people wanted. High-rise condo buildings often involve more interaction with neighbors, which is something many people began trying to avoid. As a result, people started moving out of these properties and into areas with a bit more space and freedom.

Square footage and outdoor space are driving sales

With the effects of the pandemic, a lot of people started to live differently. Many buyers were placing more value on outdoor space and a more home-centric environment. This is especially true among younger buyers.

Renewed interest in dense city living hinges on entertainment

With many people working from home, the need to find a property close to one’s work fell significantly. For those who do want to live in densely populated metropolitan areas, work isn’t as much of a concern. Things like restaurants, activities, nightlife, etc. are now the driving factor.

If you’re considering the suburbs, look for small downtowns

If you want to move to the suburbs, locating a small downtown can be very beneficial. It will ensure you’re close to all the amenities you need without the crowds and chaos of the city center.

People from pricier metros see Chicago as ideal for investment

Many Chicago real estate investors come from outside the city. It presents a good place for people to enter the real estate market as there’s a lot of potential and it’s generally more affordable than other big cities like New York or Los Angeles.

The Chicago housing market in 2023

While there’s still a lot of uncertainty in the Chicago housing market, it can still be a great place to invest. It has consistently performed better than markets in other areas of the country, and will likely continue to do so.

If you’re planning on investing, make sure you take the time to research different neighborhoods and types of properties. Your decision should also be based on if you’re wanting to move, or if you’re buying as an investment.

You may also be interested in selling your home, which can be a lengthy process, especially with the current state of the market. You can make things much easier for yourself by selling with iBuyer. We provide instant cash offers on properties, speeding up the process significantly.

The post The Chicago Housing Market in 2023: Here’s What 3 Reports Say appeared first on iBuyer Blog.

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According to World Population Review, the population in Austin, Texas as of 2023 is 1,013,293. Aside from constant sunshine and a vibrant music and art scene, the Austin housing market makes the city attractive to prospective buyers, including international ones.

Austin’s employment growth makes it an ideal location for newcomers in search of the American dream. According to a report from the National Association of Realtors, 40% of US home sales traditionally take place between May and August.

Warm weather makes this an ideal time for prospective home buyers to search for property. This is also an excellent time to shop for homes so families can be settled in a house before a new school year begins.

In the middle of 2020, Austin’s housing market shattered records. Prices soared and bidding wars erupted. Incredibly low interest rates had prospective home buyers racing to purchase a home, often virtually or sight unseen.

However, 2023 is providing Austin’s real estate market with a bit of a break. There’s more supply for home buyers to choose from, reducing the number of bidding wars and making home ownership much more attainable. Rising interest rates have worked to slow the market down, but inventory remains strong, as does Austin’s housing market.

This article takes a comprehensive look at the Austin housing market, comparing text from four different reports. This information is essential when buying a house, selling a house, or investing in any type of real estate transaction in Austin.

Keep reading to learn more about the Austin housing market and what this means for buyers and sellers in 2023.

A positive in Austin’s housing market heading into 2023

Austin’s housing market has placed a strain on residents throughout 2022, according to a report by Tahera Rahman. Homeowners have been forced to move to more affordable areas, looking for ways to find down payments on a new property.

Not every homeowner can afford a $500,000 home, making Austin’s housing market unattainable for many people dreaming of owning a house. High interest rates have also made it challenging for prospective homeowners.

Some residents have had success with purchasing Habitat for Humanity homes. However, there were only 11 of these houses built in Austin when this report was compiled.

Austin’s affordable housing program features a 116-person waitlist when Austin’s city council was lacking in its goals for affordable housing.

As Austin falls short of affordable housing for its residents, some homeowners were forced to refinance for lower rates before price interest rates increased.

The impact on buyer stock

The Austin Board of Realtors comments on high mortgage rates. Its incoming president, Ashley Jackson, said that a good amount of prospective buyers paused their home-buying search due to these high mortgage rates.

However, there is a silver lining. These high interest rates allowed the housing inventory to steadily increase. The Austin housing market reached 3.1 months of stock in November 2022.

According to ABoR, compared to November 2021, this number has quadrupled.

The last report provided by the agency showed that November was the first month since the spring of 2020 when there were no record-breaking home sales. There were also no record-breaking median home prices.

Jackson explained that seeing three months of inventory is very infrequent and uncommon. She explained that the inventory available made Austin a buyer’s market.

However, the current interest rates are preventing many prospective homebuyers from purchasing real estate.

Permit applications and housing starts have also declined since builders face elevated construction costs. Many builders have also eased back due to an influx of inventory.

However, Jackson expects that demand will track with the current interest rates and that an eventual increase in demand might be on the horizon.

Austin housing in 2023

But how does this affect housing in 2023?

Jackson explained that 3.1 months of inventory gives the real estate market some space, but not enough to relax. She understands that there is an ongoing issue that needs to be addressed.

Jackson continued to explain that City Hall’s new administration -including a new mayor- has the potential to expedite the construction of new homes throughout 2023. One way of doing so would be by lowering development fees, creating a variety of housing, along with changing zones.

If zoning laws allow for additional housing, including a variety of housing throughout the city and at various price points, then more people will be assisted. Jackson acknowledged that all ends of the market needed to be addressed.

Failure to do so could result in people in the upper end of the market shopping at the lower end of the market. This would mean lower-end shoppers being knocked out of the competition.

However, Jackson is pleased by voters passing Austin’s latest affordable housing bond. This is the largest bond the city has ever seen. The bond is for $350 million and is a game changer for Austin.

This bond is to be used to buy land for buildings and to renovate and improve current affordable housing buildings. The bond will also be used to fund grants and loans for various housing projects.

A positive in Austin’s housing market heading into 2023

Brooklee Han explains that from mid-2020 until March 2022, the Austin housing market was seen as among the country’s hottest. Local Compass agent Scott Michaels explains how chaotic the real estate market was throughout that time period, his sentiments seconded by other real estate agents in the area.

However, the Federal Reserve began rate hikes in March 2022. This is when Austin’s booming housing market came to a grinding halt.

During the height of the pandemic, the median home list price and 7-day average in Austin was $999,500. This high occurred at the end of February 2021.

By early May 2022, the annual high was $850,000. However, the average price is now $695,000, as of December 2022. This data was provided by Altos Research, recently acquired by HW Media.

There has also been a steady trend of price drops. High mortgage rates are slowing down the housing market, greatly affecting Austin’s real estate market.

Although these changes might seem sudden, they’re in line with the typical trends in real estate. The housing market is returning to a normal state of activity. Austin remains a strong city for people to live and work in, and its housing market reflects that.

Real estate agents understand that there are still plenty of buyers looking to purchase homes. They’re doing so at a more leisurely pace, instead of panicking to purchase a home amid a seller’s market. Fewer bidding wars also mean less urgency when purchasing a home.

Since mortgage rates doubled in a brief amount of time, the number of available buyers has decreased, but there are still plenty of people looking for homes.

There’s good news for those buyers, however. They face less competition throughout their hunt for a new home, and there’s little -if any- fear of a multiple-offer situation. Many properties are listed at market value. This means there may still be bidding wars but on a much smaller scale, and buyers will purchase homes at a fair price.

Real estate market in Austin dominated by international buyers, says new report

In an article written by John Krinjak, the Austin real estate market remains hot with international buyers. According to The Austin Board of REALTORS’s 2022 Central Texas International Homebuyers Report, international buyers account for the region’s economy by $613 million. These numbers are from April 2021 to March 2022.

Indian buyers account for 21% of all international homebuyers. Homebuyers from Mexico account for 10% and homebuyers from China account for 6%. Homebuyers from Canada account for 4%.

The Austin Board of REALTORS president-elect, Ashley Johnson, provided her feedback. She feels that Austin is becoming an international destination and has been for the last 20 years. The town’s events attract international buyers, coupled with an excellent quality of life.

Jackson explained that 59% of international home buyers come to Austin to live there and to invest in the city. These home buyers wish to partake in the American dream.

She also feels that Austin’s strong economy makes the area desirable to international home buyers looking to relocate to the United States. A strong economy is an excellent selling point for prospective buyers looking to move to an area that’s steadily thriving.

Jackson attributes a strong school district, remote work, and local activities to Austin’s appeal. There are more tech companies moving to the area, providing new jobs. She noted that many of the home buyers from India are in Austin on a visa, while home buyers from Mexico are in Austin with green cards.

When asked if international buyers are driving up prices in Austin, Jackson explains that she doesn’t attribute that phenomenon to international buyers. She feels it’s most likely due to local zoning laws and Austin’s failure to meet the housing needs of all buyers.

This includes prospective buyers looking to move to Austin. She acknowledges that there are more buyers, regardless of where they come from.

Jackson believes there will be a continued level of international interest in housing in Austin. Now that the pandemic has slowed down, there are plenty of opportunities for international buyers to move to Austin.

Why is real estate booming in Austin slowing down?

According to Ford Sanders, in 2020, real estate agents and developers saw Austin partake in a “gold rush.” Homes flew off the market within a few hours. However, the housing market is steadily slowing down.

Chester Wilson of Great Austin Builders (and one of the owners) explained that the frenzied housing market brought a lot of new people to Austin, creating a “perfect storm.” Many people flocked to Austin, driving the housing market through the roof.

Austin Board of Realtors president Cord Shiflet states that, as someone in the real estate industry for 25 years, he’d never seen anything like the housing market in 2020. He also reiterated that Austin’s housing market isn’t going anywhere, despite slowing down.

While homes previously took a day or two to sell, they’re now taking a month. He attributes this to doubled interest rates compared to historic lows in 2020.

The luxury real estate market in Austin is also experiencing a slowdown. However, many realtors understood that 2020’s real estate “gold rush” might eventually slow down, so they prepared themselves for it. As luxury homes sit on the market, price cuts take effect.

However, Shiflet remains positive about the current real estate market. He explains that there are plenty of great reasons to get out and buy a home.

There’s plenty of extra inventory so buyers have more options to choose from. Price reductions also add to the benefit of purchasing a home in today’s housing market.

Shiflet reminds buyers that there are no longer 40+ offers on a single house. There are fewer bidding wars, which means home buyers have a better chance of securing the house of their dreams.

Despite high interest rates, homeowners can purchase now and refinance when interest rates drop.

Understanding the Austin housing market

The Austin housing market may have slowed down, but it’s still going strong. High interest rates have made it challenging for some prospective homeowners to buy real estate, but there are still plenty of reasons to buy from the real estate market in Austin.

High interest rates can be refinanced when rates drop, and the current amount of available inventory has made it easier for prospective buyers to secure property. More inventory means home prices have stabilized while reducing bidding wars.

If you’re looking to buy or sell your home in today’s market, iBuyer can help. Use our free home value estimator for an instant home valuation.

From there, we’ll help secure an instant offer with one of our top iBuyers. It’s that simple.

The post The Austin Housing Market in 2023 – Here’s What 4 Reports Say appeared first on iBuyer Blog.

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