With an ever-growing population and influx of businesses, Houston is an economic powerhouse that merits a review. As we already enters to 2023, it's worth taking the time to look at what the Houston real estate market could be like in two years' time. Here's what you can expect from the Houston real estate market forecast in 2023!

Introduction: Upcoming Changes to Houston’s 2023 Housing Market

As we into the new year, many are wondering what changes and challenges the housing market will face. Here in Houston, we can expect a few changes to our market in 2023.

One change that is already underway is the increasing migration from California to Texas. This is most likely due to the increasing cost of living and doing business in California, as well as the state's political environment. This migration is expected to positively impact Houston's housing market as more people move into the area and compete for limited housing inventory. This could lead to increased home values and rental prices.

Another change that we can expect in 2023 is an increase in interest rates. This is due to the expected inflation that will result from the government's stimulus spending. While this may cause some buyers to hesitate, it could also spur more people to buy before rates rise further.

Lastly, we can expect more new construction in Houston next year. This is good news for buyers who have been struggling to find a home on the existing market. With more homes being built, there should be more options available for buyers at all price points.

So, what does all this mean for Houston real estate market in 2023? We can expect a tight housing market with strong competition among buyers, leading to higher prices and rental rates. If you're planning to buy or sell a home in Houston this year, it's important to be prepared for these trends so you can make the best financial decisions.

Also Read: Texas Housing Market Predictions 2022 and 2023

Economic & Political Factors Impacting the 2023 Housing Market in Houston

There are many economic and political factors that can impact the housing market in any given year. For Houston, we can expect the following factors to have an impact on the 2023 housing market:

• The Economy: The overall performance of the economy can have a direct impact on the housing market. A strong economy usually leads to higher demand for housing, which in turn drives up prices. Conversely, a weak economy can lead to lower demand and prices. In recent years, Houston's economy has been doing well, with strong job growth and low unemployment rates. This is expected to continue in 2023, which should support higher demand and prices in the housing market.
• The mortgage interest rate: Mortgage interest rates play a big role in determining affordability for buyers. Higher interest rates make it less affordable to finance a home purchase, while lower rates make it more affordable. Interest rates are expected to remain low in 2023, which will help keep the Houston real estate market affordable for buyers.
• The oil industry: The oil industry is a major driver of Houston's economy and has a direct impact on the city's housing market. When oil prices are high, there is usually more money flowing into Houston, and this results in higher demand for housing and higher prices. However, when oil prices are low (as they have been in recent years), this generally leads to weaker demand and lower prices in the city's housing market. In 2023, oil prices are expected to rebound somewhat from their current lows, which should help support higher housing demand and prices.
• Taxes: Local taxes, especially property taxes, can also have an impact on the housing market. Higher taxes can make it more expensive to own a home, and this may cause buyers to look for cheaper alternatives elsewhere. In 2023, Houston's property tax rate is expected to remain relatively stable, which should not have too much of an effect on the city's housing market.
• Political uncertainty: Political uncertainty can also play a role in the housing market. If there is a high degree of instability in the government or potential changes to local policies (such as taxation), this could cause buyers to be reluctant to commit to buying a home until they know what will happen in the future.

These are some of the economic and political factors that could impact Houston's 2023 housing market. There are other factors as well, such as population growth, labour markets and consumer confidence, that may influence the Houston real estate market forecast. 

Demographics Influencing the Houston Housing Market for 2023

As we look ahead to this year, there are various demographics that will influence the Houston housing market.

The first is population growth. Houston is projected to add nearly 1 million new residents by 2023, putting upward pressure on housing prices and demand.

Another demographic factor to consider is the ageing of the Baby Boomer generation. As Boomers retire, they'll be looking for homes that require less maintenance and are closer to amenities like medical care and shopping. This could mean an increase in demand for condo units and townhomes in Houston.

Finally, job growth will also play a role in shaping the housing market. As more people move to Houston for work, they'll need somewhere to live. This could create opportunities for developers to build new communities in suburban areas surrounding the city.

Predictions for the 2023 Houston Housing Market

It's no secret that the Houston real estate market has been on the rebound in recent years.

After being hit by the Great Recession, Houston's housing market has been steadily improving, and 2019 was a banner year for home sales. 

Here are some predictions for the Houston housing market:

1. Home prices will continue to rise

The average home price in Houston rose exponentially in 2019, and all indications are that prices will continue to grow. The combination of low-interest rates and increasing demand from buyers is expected to push prices even higher.

2. Sales will remain strong

Despite concerns about the coronavirus pandemic, sales activity in the Houston housing market remains strong. With prices on the rise and interest rates remaining historically low, more and more buyers are expected to enter the market this year. It's also worth noting that job growth in Houston remains positive, which is another key driver of housing demand.

3. Inventory will remain tight

One of the biggest challenges facing buyers in the Houston housing market is a lack of available homes for sale. The count of houses on the market has been well below historical levels for more than a year. Low inventory combined with strong demand could mean that buyers have to act quickly if they find a home they like, as competition could be fierce.

With these trends in mind, it's likely that the Houston housing market will remain strong through 2023. Prices are expected to continue rising as buyers grapple with low inventory, and demand will stay robust due to job growth and falling interest rates.

Key Trends to Look Out For!

When it comes to the Houston real estate market forecast, there are a number of key trends to look out for.

One of the most significant things to keep an eye on is job growth. Houston has been one of the fastest-growing cities in the US in recent years. This population growth will be a major driver of demand for housing, both rental and purchase.

Another key trend to watch is interest rates. They have been at historic lows in recent years but are expected to begin rising in 2021. This could have an impact on affordability and purchasing power, especially for first-time home buyers.

It’s also worth noting that the Millennial generation is now reaching the prime home-buying age. This demographic has different priorities than previous generations when it comes to where they plan to live, and they are more likely to embrace new technology and marketing tools like online home-buying platforms.

So, what does all this mean for the Houston real estate market? We can expect strong population growth and buyer demand, which should lead to continued price appreciation. However, rising interest rates could put downward pressure on prices as well—so it will be important to keep a close eye on these trends in the coming year.

Conclusion: What Can We Expect From the 2023 Housing Market?

As we move into 2023, it's time to start thinking about what the housing market will look like! Here's a gist of what we can expect from the 2023 housing market.

The economy is expected to improve in the next few years, which means that more people will be looking to buy homes. The demand for housing is expected to increase, which will likely lead to higher prices.

However, there are also a few factors that could keep prices from rising too much. For one, interest rates are expected to rise over the next few years, which could make buying a home more expensive. Additionally, there could be another recession in the next few years, which would put downward pressure on prices.

Overall, we can expect the 2023 housing market to be strong. Prices are expected to rise as demand increases, but there are a few aspects that could hold prices back.

The best advice for buyers is to keep an eye on the economy and be prepared to move quickly when you find a property that meets your needs. Additionally, getting yourself associated with a trusted and experienced real estate agent who can guide you throughout the process is important. We here at Jay Thomas Realtor Team are available round the clock to take you through the Houston real estate market and make your home-buying process seamless!