2023 Real Estate Market: Sarah Rocco's Predictions for NE Florida

Real estate, the ultimate hedge against inflation.

3 minute read.

As 2023 approaches, we sit in the midst of high inflation and increased interest rates compared to what we’ve seen in earlier months and years. To keep you well informed about the market, we are providing you with our CEO’s predictions for 2023 here in Northeast Florida. No one can truly time the market, however as many of you know Sarah spends an ample amount of time reviewing information from the best of the best and staying out in the field and in the trenches to be able to share both expert knowledge and real-time experience. 

As inflation rises, mortgage rates rise; and when inflation falls, mortgage rates fall. You may ask, “how much will they fall if inflation stabilizes or decreases?”. It is not likely that rates will go back to the 2-3% range anytime soon (if ever), but Sarah is predicting that they will go down over the course of the year from the 6-7% we are sitting at right now. This is great news for those looking to get out of their rental and start earning equity.

Coupled with the decreasing interest rates, we are going to continue seeing home prices decrease, similar to what the market has been experiencing in this last quarter, until the market stabilizes. Currently, home prices are already down about 12% (in some areas as much as 15%) and Sarah expects another 7-8% decrease in 2023. In the market right now, many sellers are still hopeful that they can sell their home for as much as they would have a year ago. As a result, they are pricing their homes over market value and therefore sitting on the market longer. However, the sellers who are motivated to sell will lower their prices to move their home because they understand that their property may have been overvalued a year ago. The market is no longer sitting at those overvalued prices with high buyer competition to drive the prices through the roof. What we saw a year ago was exceptional, and while it would have been nice to sell at the peak, that involves perfectly timing the market, which is next to impossible to do. Sellers still have a great opportunity to sell and make a return that we can almost guarantee is better than what they would have made in the stock market. We will see a balancing as buyers enjoy lower interest rates and sellers start to price at current market values after realizing that the market we saw before was an abnormality.

Sarah also wants to give a bit more of a detailed timeline to the above predictions for those of you who are considering buying, selling, or investing in 2023. Quarters one and two are where the decreases of both mortgage rates and housing prices are likely to occur. By quarters three and four we should start to see more stability  and experience a market that is once again a bit easier to predict. Be strategic when considering your options such as buying and then refinancing as rates decline, or making your listing stand out from what is becoming a sea of other homes on the market.

With all this change, you don’t want to tackle this market without a knowledgeable real estate professional on your side. You should look for someone who is working full-time in the market and is an expert on all the current information. There are still phenomenal opportunities for buying and selling out there, but you will benefit from an expert’s eye who can find the right deal and get you all the way to closing.

The Rocco Group is not slowing down; we are winding up in preparation for this upcoming market. We have 10 full-time employees servicing our 7 agents! As a customer, you can confidently rely on our team to have the necessary resources and knowledge to help you reach your goals. Your Realtor should be part of your investment strategy team when you think of your wealth advisors. Please consider us as part of your investment advisory teams as you head into 2023.

Additionally, we all know that we are currently living in highly inflationary times. What you may not know is over the past 40 years, real estate has proven to be the number one asset class as a protection against inflation. You may know us as the team who helps with your residential real estate needs, however, we’d also like you to consider us as a resource for multi-family and commercial investment as well. If you, your family, friends, or your colleagues would like to grow your assets during these inflationary times please feel free to give us a call and we would be happy to take care of you and any of your referrals.

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