Broad Street Brokers, LLC

2023 Real Estate Market Trends

2022 saw soaring inflation, a spike in mortgage rates, and low housing inventory, especially in our area. So, what will 2023 bring for the real estate market?


While details will differ depending on the region, here are some general real estate market trends to expect in 2023.

Along with covering 2023 real estate predictions, we’ll address some of the most commonly asked market questions we hear, including:



2022 Market Report At a Glance

Here are some key stats on the 2022 Real Estate Market as reported by the Wisconsin Realtor Association:

A Guide to Real Estate Market Predictions for 2023

Here are the top 10 real estate market trends we may see in the upcoming year.

1. Seller Mindsets May Shift

Affordability difficulties will remain in 2023, but buyers may notice a shift in seller mindsets. Sellers are aware of the changing market conditions, specifically the effects of inflation and rising interest rates. This may translate to a market that slowly begins to favor buyers.

Sellers are beginning to understand they may need to negotiate a little more on price. With these shifts, expect some changes to pricing strategies as we come into 2023.

2. A Continued Shortage of Affordable Homes

Housing inventory nationwide is expected to increase in 2023. However, we expect local housing inventory to remain fairly tight, especially affordable workforce housing.

As we covered in our last blog post, Wisconsin is experiencing an affordable housing shortage. While local advocates are hard at work addressing the affordable housing shortage, a remedy will take time. We are hopeful that positive changes will take effect as we move further into the year.

3. A Preference for Green and Simple Living

2023 will see a growing preference for homes and properties that cater to ‘green and simple’ living. This means natural amenities, larger yards, the ability to have a garden, and sustainable home features will be increasingly popular.

Buyers will continue seeking properties that support a more sustainable, relaxing lifestyle that is more closely connected to nature. With our abundant natural resources, clean water, hiking trails, pristine beaches, and acres and acres of County and National Forest to explore, our area generates a great deal of interest.

We work with many buyers who move here from larger cities, looking to create their own little slice of paradise. We love helping families find their ideal home to bring their dreams of sustainable, low-key living to fruition.

4. Rent Prices Will Remain High

Tough market conditions will force families to rent for longer, meaning rent prices will likely remain high in 2023. A lack of rental inventory may also contribute to a rise in rent prices.

5. Mortgage Rates May Stabilize

One of the biggest drivers of home sales is mortgage rates. With inflation expected to slow slightly, the new year may bring some much-needed stabilization in mortgage rates.

While a return to pre-pandemic mortgage rates is highly unlikely, experts are hopeful that 2023 will bring some relief to current mortgage rates.

If mortgage rates stabilize, or even drop this year, it may encourage more sellers to list their homes and give buyers increased confidence to get in the market.

According to The Mortgage Reports, here are the 2023 mortgage rate predictions:

Average 30-year mortgage rates will land between 5.0% and 9.31% 15-year fixed mortgage rate will fall between 4.5% and 8.75%

6. “Rate Lock-In” Will Continue to Affect Homeowners

“Rate lock-in” refers to homeowners who are looking to buy a new home but stick with their current home because of their low mortgage rate. With a majority of homeowners locked in at interest rates of 5% or lower, homeowners will be hesitant to sell if it means taking on a higher interest rate on a new home.

7. New Home Construction Will Be Down

Although lumber prices have fallen from record highs, overall construction costs are still higher due to supply and labor shortages. Higher mortgage rates and inflation are also causing a decline in new home builds. Combined, these factors will continue to slow the construction of new homes in 2023.

8. The Internet Will Reign Supreme for Obtaining Property Information

Just a decade ago, printed real estate buying guides were still fairly popular in our area. Now, statistics show that less than 1% of new homeowners use magazines, books, or print materials during the home-buying process.

Instead, the majority of potential buyers find properties for sale online. This makes it more important than ever to list your home for sale online.

9. Millennials Will Make Up a Significant Portion of the Market

What is the reason behind the shift from a preference for print materials to Internet information? This may come down to the large majority of millennials that make up the housing market.

According to the 2022 Home Buyers and Sellers Generational Report by the National Association of Realtors (NRA), millennials account for 43 percent of home buyers. 2023 may see an even higher rise in millennial home ownership.



10. Buyers Will Remain Cautious

2022 saw a year of increasingly cautious home buyers and we expect this trend to continue into the new year.

With interest rates so high, buyers may choose a ‘sit and wait’ approach to the market. Until we see a drop in mortgage rates and a decrease in competition, buyers will remain cautious going into 2023.



Have Questions About the Local Real Estate Market?

After a volatile 2022, we expect the real estate market to settle slightly in 2023. If you have questions about the market, please get in touch with one of our experts.

We know this is a tough market to navigate for buyers, but we are here to be your trusted, knowledgeable guides. Whether you are a first-time home buyer, an investor, or are curious about listing your home for sale, we’d love to chat with you.

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