Will There Be A Real Estate Housing Market Correction In 2023?

Two years of continuous price increases may lead to a housing correction in the US. People who have never experienced something similar are currently stressing over it, especially those who haven't. The answer depends on which side you're on. On the one hand, it means housing affordability is possible. However, your property could lose some value.

Real estate investors must keep up to date on what's happening in the US housing market. It's common to hear that the housing market is headed for a correction, but what does that mean?

Housing Market Correction: What Is It?

Since the beginning of the decade, the housing market has risen steadily in the US, and more and more people are buying properties to rent out or invest in.

In recent history, one housing market correction has been the 2007-2008 housing market crash. Some factors, including mortgage credit availability, job losses, and rising interest rates, can cause a housing market correction. For this reason, industry experts predict a real estate housing market correction in the near future.

Long-term and short-term renters will benefit from the correction, and those interested in investing in properties will also find better deals.

Corrections in the real estate housing market

Since the pandemic began, property prices have fallen. However, since then, they've been rising. Because of price increases, first-time buyers are finding it harder to enter the real estate market.

As mortgage rates rise, home prices increase as well. The real estate industry is expected to see significant declines in sales in 2023 as a result of a possible correction.

As a result, many people are turning to long-term or short-term rentals instead of buying homes. As a result, it's becoming clear that more investment properties should be available for buyers who don't want to buy but are looking for investment opportunities.

Will There Be a Housing Market Correction in 2023?

It was a steady market before the pandemic. In San Francisco, the median property price had risen by more than $500,000. Buying a San Francisco property in 2009 would be worth 90% more in 2019. That was before COVID-19 swept the world and upended everything.

During the pandemic, we saw how property prices and historically low-interest rates on mortgages fell. According to a Zillow report, the housing market correction could happen in 2023 because of three major factors. Over the last several months, we have also seen both property prices and mortgage rates rise.

In addition to reducing demand for residential properties, short-term rentals will also make it harder to sell them.

• Buying a home will become more expensive with higher interest rates.

• High-priced homes are in excess due to an all-time high in real estate prices.

• A housing market correction is coming. Experts predict the median price will drop 8% in 2023.

It is a good time to rent or buy a house, as median property prices are expected to decline significantly. The market is predicted to correct in 2023, with prices falling 8%.

Veteran and Industry Experts' Views

Real estate is a volatile market. For quite some time now, real estate experts and veterans have warned about a housing correction in the real estate market. Property prices are growing at an alarming rate, which is why many people rent their properties.

According to industry experts, buyers and sellers will benefit from a correction. For example, people who want to buy homes but do not have enough money will finally be able to afford them. The property price may go up after the correction for people who want to sell it.

According to industry experts and veterans, it pertains to investment strategies other than rental property investments. There's no point in buying a home if you don't plan to live there or convert it into a rental property investment.

Real Estate Investing: How to Stay Ahead

The predictions made by real estate experts about the housing market correction might make you wonder how to invest in real estate. If the housing market slows down, you can still invest in rental properties and make money.

Long-term and short-term rental properties have their own advantages and disadvantages, but both make for better investment opportunities today than house flipping.

Investing in affordable rental properties is a good investment strategy. Housing affordability has become out of reach for many people, leading them to choose to rent.

With eased travel restrictions, short-term rentals have also increased significantly. Renters can make a decent return on their investment as rental property owners. Vacation rental properties are now a lucrative option for investors like you.

Investing in Profitable and Affordable Properties

An investment property website is the best way to find rental properties in lucrative markets. Investing in real estate on the platform offers investors a wide range of tools. The property search, real estate heatmap, and investment property calculator are all useful tools.

2023's Most Affordable yet Profitable Markets

The data we provide to real estate investors is the most accurate and up-to-date. The US housing market is expected to be corrected in 2022, so we examined the numbers to determine which are good investment opportunities.

5 Markets Suitable for Long Term Rental Property Investments

1. Waxahachie, TX

2. Median Property Price: $478,607

3. Average Price per Square Foot: $200

4. Days on Market: 77

5. Number of Long Term Rental Listings: 174

6. Monthly Long Term Rental Income: $2,016

7. Long-Term Rental Cash on Cash Return: 2.23%

8. Long-Term Rental Cap Rate: 2.28%

9. Price to Rent Ratio: 20

10. Walk Score: 65

2. Melbourne, FL

10. Median Property Price: $496,841

11. Average Price per Square Foot: $257

12. Days on Market: 64

13. Number of Long Term Rental Listings: 581

14. Monthly Long Term Rental Income: $2,054

15. Long-Term Rental Cash on Cash Return: 3.18%

16. Long-Term Rental Cap Rate: 3.26%

17. Price to Rent Ratio: 20

18. Walk Score: 73

3. Morrisville, NC

19. Median Property Price: $498,183

20. Average Price per Square Foot: $244

21. Days on Market: 48

22. Number of Long Term Rental Listings: 227

23. Monthly Long Term Rental Income: $2,006

24. Long-Term Rental Cash on Cash Return: 2.57%

25. Long-Term Rental Cap Rate: 2.59%

26. Price to Rent Ratio: 21

27. Walk Score: 41

4. Buckeye, AZ

28. Median Property Price: $500,110

29. Average Price per Square Foot: $249

30. Days on Market: 61

31. Number of Long Term Rental Listings: 204

32. Monthly Long Term Rental Income: $2,067

33. Long-Term Rental Cash on Cash Return: 2.93%

34. Long-Term Rental Cap Rate: 2.97%

35. Price to Rent Ratio: 20

36. Walk Score: 72

5. Palm Harbor, FL

37. Median Property Price: $502,088

38. Average Price per Square Foot: $301

39. Days on Market: 55

40. Number of Long Term Rental Listings: 193

41. Monthly Long Term Rental Income: $2,116

42. Long-Term Rental Cash on Cash Return: 2.46%

43. Long-Term Rental Cap Rate: 2.50%

44. Price to Rent Ratio: 20

45. Walk Score: 64

5 Markets Suitable for Short-Term Rental Investments

1. North College Hill, OH

• Median Property Price: $190,121

• Average Price per Square Foot: $135

• Days on Market: 47

• Number of Short-Term Rental Listings: 124

• Monthly Short-Term Rental Income: $2,296

• Short Term Rental Cash on Cash Return: 6.81%

• Short Term Rental Cap Rate: 7.18%

• Short-Term Rental Daily Rate: $126

• Short Term Rental Occupancy Rate: 52%

• Walk Score: 74

2. Midway Park, NC

• Median Property Price: $201,800

• Average Price per Square Foot: $139

• Days on Market: 54

• Number of Short-Term Rental Listings: 113

• Monthly Short-Term Rental Income: $2,037

• Short Term Rental Cash on Cash Return: 5.64%

• Short Term Rental Cap Rate: 5.78%

• Short Term Rental Daily Rate: $106

• Short Term Rental Occupancy Rate: 51%

• Walk Score: 12

3. Rockford, IL

• Median Property Price: $204,660

• Average Price per Square Foot: $133

• Days on Market: 63

• Number of Short-Term Rental Listings: 115

• Monthly Short-Term Rental Income: $2,350

• Short Term Rental Cash on Cash Return: 5.42%

• Short Term Rental Cap Rate: 5.67%

• Short-Term Rental Daily Rate: $104

• Short Term Rental Occupancy Rate: 57%

• Walk Score: 87

4. Syracuse, NY

• Median Property Price: $204,819

• Average Price per Square Foot: $113

• Days on Market: 75

• Number of Short-Term Rental Listings: 203

• Monthly Short-Term Rental Income: $2,564

• Short Term Rental Cash on Cash Return: 6.06%

• Short Term Rental Cap Rate: 6.24%

• Short-Term Rental Daily Rate: $153

• Short Term Rental Occupancy Rate: 57%

• Walk Score: 53

5. Rochester, NY

• Median Property Price: $209,408

• Average Price per Square Foot: $140

• Days on Market: 54

• Number of Short-Term Rental Listings: 423

• Monthly Short-Term Rental Income: $2,532

• Short Term Rental Cash on Cash Return: 5.46%

• Short Term Rental Cap Rate: 5.61%

• Short Term Rental Daily Rate: $139

• Short Term Rental Occupancy Rate: 56%

• Walk Score: 57

Conclusion

As a real estate investor, you need to plan for your next move as predictions about a housing market correction continue to make their way online. You need to stay informed about the US housing market and plan accordingly. Accessing a database that keeps you up-to-date with actual market conditions is also helpful. The right data and information can make a big difference in your success as a real estate investor.

To make better investment decisions, you'll need all the information and data you can get to make an informed decision.

If you’d like to talk more about property management, or you need help with Everest Property Management, please contact us at Everest Realty.

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