2023 Predictions? What are your predictions?

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2023 Predictions?  What are your predictions?

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If rates are in the mid 4s to low 5s, there will be no concerns regarding a housing correction.

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That was a prediction, it could be Vegas, Utah but I thought AZ, more specific Phenix. I know a ton if flippers, wholesales, syndicators, apartment owners that are very active and boots on the ground. Inventory rising, lots of CA people flooded the market and purchased. Lots of Wallstreet buyers bought a ton and I think Phoenix got tons of capital in that paid very high prices. Vacancy rate according to my friends for rentals is getting close to 10%. I think AZ just like Vegas becomes a BOOM and Bust market due to all the capital that comes in these markets during the good times. Just my opinion or course.

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Kenny I completely agree! I'm in the Boise market which was one of the highest in year over year growth so we are seeing declines right now. And with holidays and the weather I think a lot of people are waiting to list until spring. I think we may have a flood of inventory on the market here in spring and see prices continue to decline. But I also believe inflation will continue to decline and rates will lower at the end of 2023 and we will see prices start to stabilize. I bought an STR last year at 6.125% and I can't WAIT to refinance that baby!! :)

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I see the fed slowing down in 2023 with interest rates remaining in the 7% range for a few years. Or until a major economic recession hits. I see inflation slowing down to around 4 or 5% by years end. Consumer spending and confidence is still high leaving the economy flush with cash circulating. I see housing prices only down 10-15% at the most in some markets from their highs. Home prices went up on average 30-40% in most markets since 2020 so a 10-20% drop isn’t that bad considering how much interest rates have shot up. And I see the unemployment rate still very low by the end of the year due to a labor shortage.

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Hi Kenny.Thanks for the post.Rates-I predict around 5% by year end for conventional, with buy downs being much more common, which will bring rates to low to mid 4's.Real estate market-It's going to drop a bit more before it goes up- but I do expect all of this in 2023. the 5-10% correction by year end feels about right. Already, I'm seeing some bounce back by investors that are realizing the sky isn't falling. Great time to get deals right now, for a well positioned 2023-2025.Best investment opportunities-Be a limited partner in a fund. Syndication investing with partners. Or individually:Select LTR SFH's with higher projected ROI, STR SFH's with huge marketing pop and higher projected ROI, 2-10 unit LTR's. Highly selective crypto- for those that purchase, now.Best market/worst market-Too early to tell. Arizona will be in the top 5-10 states. It will be a great year, especially considering we are quite STR friendly.FED-Yes, very likely- but also may hold until sometime 2024.Recession-I'm hesitant to use this word. Bottom line, inflation is going to really hurt most people, as it already has been. The best way to insulate ourselves is to intelligently invest in real estate for cash flow and well positioned, based on property value and in good market areas.Jobs-Tough to say. A lot of changes will come this year- many of which haven't been announced or hinted at.

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I respect your opinion and prediction, but would you summarize why Arizona would be the worst market?

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It will effect a lot more than real estate, the average payment that is NOT being paid is pretty high and that extra income that are taking in is helping them a lot. Why the government keeps pushing out the payments,

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I agree with you. The point about the capital and people is true. Like you have mentioned it could happen somewhere else. I actually think that it is going to be worse in cities with high property taxes. Anyway, I hope something happens so things get normal. Enough with the unreal numbers.

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insurance prices are a major problem and parts of Florida will feel pain from that and just to much capital in and over demand for sure.

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Here are my thoughts. Think Rates will stay above the 5% range and will most likely be closer to 5.5-6.5%, FED will not lower rates until 2024 and it will be very small increments when they do. Housing market as a whole will come down 10-15% with some markets being over 20-30%. Best markets will continue to be the lower priced affordable markets. Inflation will prove to be sticky and stay above the 2% target at around 4%.