REALTORS® Foresee Strong But Calmer 2023 Market
Buyers will feel a little less pressure as home prices stabilize and the inventory crunch begins to slowly loosen over the next year, CEOs of five REALTOR® associations across the country predicted during a Tuesday webinar, “2022 Housing Market: Boom or Bust?” virtual briefing presented by the Northern Virginia Association of REALTORS®. The leaders—from associations in Colorado, Nevada, North Carolina, Texas and Virginia—offered insights into their local markets and how they compare to the nation as a whole for the remainder of the year and into 2023.
Charlotte, N.C.: Normalcy on the Horizon
Anne Marie DeCatsye, CEO of the Canopy REALTOR® Association in Charlotte, N.C., said the city’s explosive growth—which was happening even before the COVID-19 pandemic began—has created affordability challenges for home buyers. Charlotte is a magnet for new residents and businesses because of the city’s thriving finance sector, status as a major distribution hub with international airports and ports, and low corporate tax rate. Inventory there is tight, with homes on the market selling in an average of just 14 days. The median sales price of a home in Charlotte hit $462,000 in May. “Buyers have little room to negotiate,” DeCatsye said.
While rising interest rates, inflation and general economic uncertainty could lead to some slowing in the Charlotte market, “‘slower’ is a relative term,” says DeCatsye. “But the market is starting to look a little more like 2019. And our inventory started to rise for the first time [since 2020] between May and April.” DeCatsye predicts that prices are unlikely to decrease, but the sharp increases of the last two years may level off.
Denver: Inflation Hits Hard
Inflation is a significant issue in Denver, said Nobu Hata, CEO of the Denver Metro Association of REALTORS®. The area has a sizeable population of blue-collar workers that are more sensitive to the effects of rising prices, and with a steady influx of newcomers—as well as supply-chain issues and labor shortages—home prices are surging. “A $1 million home is no longer considered luxury,” Hata said.
Despite the supply constraints and labor problems, new construction is booming in the region. Hata said he sees migration into the Denver area continuing, which will affect both the homebuying and rental markets. The Denver suburbs are seeing a sharp increase in institutional buyers who plan on renting their properties rather than returning them to the market, Hata said. The result is higher rents and less For Sale inventory. DMAR is working with the local government to create and promote programs designed to help renters move into homeownership, such as rent-to-own education and down payment assistance. “When consumers are ready to own, we’ll be there as a REALTOR® association to help them out,” Hata said.
Las Vegas: Diversified Economy Attracts Newcomers
Las Vegas is another city experiencing a steady stream of new residents, said Wendy DiVecchio, CEO of the Greater Las Vegas Association of REALTORS®. The greatest percentage of incoming residents are flocking from the neighboring states of California, Arizona and Utah. While Las Vegas is known for its casinos, the economy is rapidly diversifying—attracting warehousing facilities for Amazon and Apex, several new professional sports teams and manufacturing facilities for driverless cars. The area, which attracts snowbirds and retirees, is likely to continue seeing rising prices. But DiVecchio said she believes the lack of a state income tax in Nevada will help to keep the area affordable. In addition, the association is working with the local government on land-leasing options to increase affordability. “[The Bureau of Land Management] is leasing land, and then we build housing on it,” DiVecchio said. “People own the homes, but they don’t have to pay the land prices.”
Fairfax, Va.: Home Prices, Sales Leveling Off
Fairfax, Va., is fortunate to have low unemployment and high average income, says Ryan McLaughlin, CEO of the Northern Virginia Association of REALTORS®. The economic stability is due in part to the city’s proximity to the nation’s capital and a large population of federal employees and defense contractors. The area also boasts a booming tech sector that includes Amazon, Google, Facebook and Raytheon Technologies. Despite the solid economic underpinnings, the region also has experienced surging home prices, and inventory currently sits at a tight 0.8-month supply. McLaughlin predicts that both sales and prices will level off, with prices increasing by only 3% by the end of the year. In addition, the association is looking at ways to increase inventory and affordability, with one possible avenue being zoning reform in Fairfax’s Arlington County. “Arlington is looking at eliminating single-family zoning to allow for multifamily and building more units,” says McLaughlin. “We’re looking at all potential positives and negatives.”
San Antonio: An Affordability Haven
The efforts that the San Antonio Board of REALTORS® has put into advocacy for its members and consumers have paid dividends for affordability, said SABOR CEO Gilbert Gonzalez. Though the region has experienced a sharp increase in population—Texas as a whole has gained 500,000 new residents every year since 2019—the local San Antonio market still offers homes at many different price points. The National Association of REALTORS® recently dubbed San Antonio a “hidden gem” for real estate. Gonzalez credits the strong local economy and SABOR’s work with the local government and the San Antonio Housing Authority with keeping the market open to more consumers. “We worked with the city to make San Antonio affordable now and in the future,” says Gonzalez. “The city continues to remain the most affordable metroplex in the state.”