3 Real Estate Investing Trends for 2023

real estate investing trends for 2023

Real estate trends tend to fluctuate, especially in recent years. Trends in 2023 suggest a transitioning period with higher borrowing costs, increased cash flow and restructured capital stacks. What does real estate investment look like now as we continue navigating the new normal? Prepare for the year ahead by reviewing these current trends and top markets in 2023.

1. Larger Demand for Single-Family Homes

Higher demand for single-family homes can mean a few things, including a decrease in rental property markets, more movement from cities to suburbs and a shortage of single-family homes in these areas. This trend reflects the COVID-19 pandemic’s impact, but it also considers that millennials are entering the homeownership phase of their lives. This demand creates a decrease in inventory while skyrocketing the need for new construction.

dropping mortgage rates

2. Dropping Mortgage Rates

Inflation led to a significant increase in interest rates in 2022, reaching 7.12%. The relationship between inflation and financing costs means these high mortgage rates will likely remain comparable. However, they are expected to dip, with some service providers predicting rates as low as 5.25% by December 2023.

3. Increased Digital Real Estate Platforms

COVID-19 pushed users to turn to more digital solutions than ever before — and the real estate market is no exception. Homebuyers used real estate platforms such as Zillow, going as far as purchasing a home without seeing it in person. With virtual house hunting’s momentum, 3D tours, animated home living videos and virtual staging are becoming more popular in a digitized world.

The Top 4 Markets for Investing in 2023

As families transition into single-family homes, most people opt for towns in the Sun Belt of the United States. This area stretches along the country’s southern region and encompasses 18 states along the way. Here are the top markets within this area to invest in this year.

1. Nashville, TN

The Nashville, TN, real estate market has risen over the past decade, keeping a sustained population and job growth at the top. Nashville also has above-average white-collar employment and economic diversity, which appeals to most investors.

2. Dallas/Fort Worth, TX

As a central part of the Sun Belt, the Dallas and Fort Worth area is large, diverse and affordable. Their economic performance has seen a solid recovery and continues to prosper.

3. Atlanta, GA

Similar to Dallas and Fort Worth, Atlanta’s location makes it a fast-growing market in the U.S. In fact, its housing market is looking to lead the U.S. in 2023 because of its affordability and population growth.

4. Austin, TX

Austin, TX, is fighting high home prices by dropping its housing market to normal activity in September 2022. This trend is promising for home buyers and investors as the housing market remains strong, with homes selling closer to the asking price.

Invest in Real Estate With a Self-Directed IRA Account Today

As housing markets are coming out of the post-pandemic slump, now is a great time to invest in real estate. Contact Accuplan Benefits Services at a location near you today for more information on how to invest with a self-directed IRA.

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