The real estate industry has seen intense highs and lows over the past few years. And the future of the real estate market going into the rest of 2023 and beyond is a similarly mixed bag.
High mortgage rates and home prices, combined with continued inflation and a potential recession, are all making new home-buyers nervous. At the same time, however, in March the median home price declined year-over-year for the second month.
In light of this, what does the future of luxury real estate look like? And what does it mean for the industry as a whole? Here we’ll dive into what’s happening in the real estate market, and what predictions experts have for the future.
What is the Future of the Real Estate Industry?
Housing market predictions are difficult to make, as the landscape can change so rapidly and is influenced by outside factors. Some experts are hopeful for the future of commercial real estate. But some data from early 2023 has analysts predicting the market will continue to cool down.
Although mortgage rates were declining in March and early April, they climbed back up to just over 6% by the end of April. Some experts say that if high mortgage rates and home prices persist, the real estate market will have a slow climb back to where it sat before.
Over the last few years, people were purchasing homes rapidly and at very low rates, decreasing the available supply of homes. This new low availability of homes, coupled with higher interest rates and inflation, are making it difficult for new buyers.
Though the housing market inventory is currently low, some trends indicate this may improve in the future. Single-family construction increased by over 2% in March for the second month in a row, and applications for building permits also increased 4%.
While the available supply of homes may go up, medium home prices might continue to climb as well. And if the number of available homes continues to outpace demand, that will also put upward pressure on prices.
In January 2023, the supply of available homes for sale in Las Vegas rose by about 3.25 months, a drastic increase from the preceding months. That said, a balanced market usually has about four to six months of homes available, making Vegas a slight buyer’s market.
The always-growing hospitality industry in Las Vegas has some experts hopeful that the market will bounce back as people continue to move to the area for the food and nightlife. At the same time, Vegas is now home to several national sports franchises, all of which will have state-of-the-art stadiums and bring with them a clientele that’s looking for luxury or second homes.
The Future of Real Estate: Predictions for 2024 and Beyond
Though the outlook for 2023 is a bit of a mixed bag, experts predict that 2024 will be a more stable year for the real estate market.
The US News Housing Market Index predicts that the housing shortage will continue through the end of this decade, which will make it a seller’s market in many regions around the country. If mortgage rates decline overall, home prices will likely remain flat for most of 2024.
At the same time, the rising cost of building homes and the consequences of climate change will also have a big impact on the real estate market. Builders and homeowners will have to factor in the cost of building sustainable homes that are resilient to extreme weather events.
Beyond 2024, new building technologies like 3D printing and factory-built structural components will help the construction industry build homes faster while increasing the quality of materials. Experts predict that home prices overall will increase by up to 2% by 2025.
The Future of Real Estate Technology
The future of real estate technology will continue to play a role in how people buy and sell homes.
Tools like virtual and augmented reality tours make it easier for people to explore listings further from home. This is something that can be especially useful when looking for second or vacation homes. Homes with 3D tours also sell up to 31% faster, and for a higher price.
Technology also makes it easier for all parties involved to streamline the processes involved with buying or selling a home. Real estate agents, brokers, lenders, property managers, and homebuyers can automate some of their day-to-day responsibilities. More parts of the home-buying process can be done online.
Though technology will certainly impact the future of real estate agents, it won’t replace them entirely. No technology can replace the expertise, attention, and personalized care that a good real estate professional will give you.
Learn More About Luxury Real Estate
At IS Luxury, we know everything there is to know about the luxury real estate market in Las Vegas. Reach out to one of our expert agents today to learn more about the luxury market here, and to learn what it would take to buy or sell your home.
