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2023 Luxury Real Estate Trends

Our luxury real estate partners share their forecasts for this year's housing market

Article by Compiled by Bree O'Brien

Photography by Courtesy of featured partners

Originally published in Kirkland Lifestyle

Mark von der Burg and Erin Harper 

VDB Compass

  • What are your thoughts on what the real estate market will do in 2023?

Seattle’s ranking as one of the top 10 cities nationally, enhanced by natural beauty and active lifestyles, draws an influx of buyers to the area. Inventory is on the rise but numbers remain historically low overall. In the last few months, pricing has come under negative pressure, causing sold prices to level off or decline from 2020, 2021 and the first quarter of 2022. The 2023 market continues to present valuable opportunities for those looking for long-term ownership, new construction and investment properties.

  • Any advice that you would offer a home buyer this year?

Properly priced, well-prepared homes continue to outperform the market. That's why it is important to be prepared to move quickly when finding one you love. Selecting an experienced, connected broker who can educate you on value, help navigate the offer process, and negotiate on your behalf is key for optimum results. While interest rates are currently higher than in recent years, they are in line with rates years prior to the pandemic. It's a good time for buyers who were unable to compete in a highly competitive market to re-engage.

  • Any advice that you would offer a home seller in 2023? 

Buyers are still buying… because they are still starting families, getting married, upsizing, downsizing, and relocating for work. As a result, well-prepared, turnkey homes continue to sell in the Kirkland market. With increased inventory, buyers can be more selective, making proper presentation and price imperative for sellers. Be prepared to offer a perfectly polished, staged product to elevate your home’s presence and engage potential buyers. A skilled professional with attention to detail in the preparations, luxury marketing and successful negotiation will ensure the best return on your investment, especially as we return to a more balanced market. 

Marilisa Vergottini

Compass

  • What are your thoughts on what the real estate market will do in 2023?

Three indisputable nationwide factors will affect real estate appreciation in 2023: Mortgage Interest Rates, Unemployment and Home Supply. Year-on-year home values have dropped up to 25% and are expected to drop further before leveling out. Based on what I’m seeing, I predict a steady Spring market, with competing offers on well-priced, desirable homes. 

Meanwhile, mortgage rates are likely to settle and decrease slightly as the year progresses, with a projection of 5.5% by the end of 2023..

As major employers make job cuts in this first quarter, we expect to see unemployment rise to around 5.5% by year end, though it’s unlikely to tangibly impact our local market.

In the Greater Seattle Area we remain woefully short on inventory, and demand - despite economic circumstances - remains high. As such, it will likely remain a seller’s market overall. 

Net-net? Prices may fall a little more - a reflection of sellers pricing unrealistically high.

  • Any advice that you would offer a home buyer this year?

A well-priced home this year will still sell fast at or over asking - this has been the case through Q4 of 2022 and will continue as we move into 2023. Bear in mind that if you're moving within the state, you have competition from elsewhere - last year two-thirds of Snohomish County's population growth came primarily from California.

Shop around for the best mortgage rates, protect yourself with contingencies as you place offers, but don't low-ball a well-priced home or you'll miss out.

  • Any advice that you would offer a home seller in 2023? 

First, remember that your home is likely still worth between 5-10% more than it was in January 2022 - let that sink in for a minute. Second, forget the crazy market in Spring of yore - it was a perfect storm that we may not experience again for years to come.

Be at peace with your realistic home value (ask your realtor for a detailed analysis), and price accordingly. If your home is well maintained, impeccably presented and move-in ready, it will sell faster than its competition - and for more. Be prepared for more time on market (average 30-35 days currently), but know that well-priced, desirable homes are still selling within a week.

Pocket neighborhoods will be affected slightly differently depending on factors such as prior rate of appreciation and desirability, so do contact me directly for a specific neighborhood analysis.

Max Rombakh

Windermere

  • What are your thoughts on what the real estate market will do in 2023?

2023 will be an interesting year. Fundamentally, real estate in Bellevue and Kirkland is in good shape: Inventory is very low and there are many buyers in the marketplace - some that truly need to move, and some seeking deep discounts. Sellers aren’t reducing prices and buyers are waiting for price reductions, leading to a stalemate. The real estate market is staying neutral and should remain so through 2023 if rates continue to drop and inventory remains low. The median price of homes has adjusted 20-30% from the peak, which motivates buyers who understand that they can refinance in the future. 

Properties checking many boxes for buyers and offering unique characteristics such as views and waterfront, coupled with a great location and layouts, remain in high demand. Sellers with favorable interest rates and no life changes requiring a sale are not putting their homes on the market, putting pressure on inventory. 

  • Any advice that you would offer a home buyer this year?

Understand that prices are down because interest rates are higher than at the peak. They won’t stay high forever and if they continue to drop, demand will increase and if inventory remains low multiple offers and price escalations could happen again. Buyers are in a market that we haven’t seen in several years and unlike during the peak, you don’t have to guess how much over market you have to pay. You are buying a home at market value or below and can refinance the rate later. As long as you’re buying a home that you intend to be in for at least five years and you can afford it, you will be rewarded by appreciation. The Kirkland and Bellevue real estate markets are resilient and can bounce back quickly. 

  • Any advice that you would offer a home seller in 2023? 

 Sellers - Yes, you missed the peak, hindsight is 20/20, but your home has appreciated and is worth more than it was two years ago. Be careful with pricing - hire a broker who knows the local market. Different market dynamics today mean that buyers aren’t willing to compromise easily. Homes with drawbacks will be tougher to sell now. Pricing is key, presentation and local market knowledge is monumental today in handling buyer objections. If the home isn’t priced right, it could send the listing into a spiral chasing the price and days on market.

Brian Hopper

Realogics Sotheby's International Realty

  • What are your thoughts on what the real estate market will do in 2023?

At the time of writing this I am already surprised at the level of buyer activity starting after the new year - buyers have acclimated to higher interest rates. Rates below 6%? Don’t expect it in 2023.

I’ve been thinking about each of 30+ families that I had the honor and privilege to work with last year. 2022 marked many milestones for me: My family and I moved to a different community within Kirkland, and I finished my 18th year of selling homes, selling over $68,000,000 in total sales volume. I look forward to helping my clients navigate this new market in 2023.

  • Any advice that you would offer a home buyer this year?

2023 is the year you do not want to let your dream home slip by. Fewer buyers are pursuing homes, and builders and flippers are slowing acquisitions, meaning reduced competition. Buyers have more negotiating power and can slow down and perform inspections. A well-prepared home in Kirkland may still bring multiple offers, so a trusted real estate professional is crucial to get the home you want.

Yes, you missed all-time low rates but not having to purchase well above asking price will save in the long-run, and you can refinance when rates drop.

Where’s the value for buyers? New construction. The Kirkland market is still competitive, so submit your best offer. Most importantly, partner with a local real estate professional who has the experience to ensure you get that home you desire in our beautiful city. 

  • Any advice that you would offer a home seller in 2023? 

Your listing price must be competitive and realistic. Expect your home to take longer to sell than you think it will. My pricing strategy: Never chase the market, find a suitable price for what you predict the market will do next. The first offer received is often the best. Any Kirkland sellers in 2023 who have owned for over 12 months should have decent equity built up (provided you didn’t pull out a HELOC to buy that boat). The median home value climbed from $526,000 in 2015 to $1,250,000 in December 2022.

Today, for a home to reach top dollar it must be detailed to the nines. Properly preparing your home will give you leverage in what is becoming a buyers’ marketplace. My team has the resources and trusted vendors to handle any needed improvements and preparation.

Ferrera Team - Catherine Ferrera and McKenna Ferrera

Compass

  • What are your thoughts on what the real estate market will do in 2023?

We think the real estate market has bottomed out or will have a little more to go. January 2023 has shown modest improvements as new buyers are out looking and the rates have stayed a bit more stable. We think we will have a modest uptick until May and then level off, but if the rates come down and land in the low to mid 5% range it could spark some more movement with both buyers and sellers.

  • Any advice that you would offer a home buyer this year?

Start speaking with a lender to understand what you can afford and receive an initial pre-approval amount as soon as you can. Also, start looking sooner rather than later and find a qualified realtor to work with who has experience negotiating. Currently many of our deals have had the seller contributing toward closing costs instead of dropping the price. This credit can help bring down the buyer’s interest rate while keeping the seller’s desired sales price the same, which is a win/win situation for both buyers and sellers. 

  • Any advice that you would offer a home seller in 2023? 

Prep your home correctly! Make sure necessary maintenance is up to date, where you would feel confident if a buyer were to make an offer contingent on an inspection. Besides maintenance, make sure to visually prep your home. This includes a deep clean, possibly painting and getting carpets professionally cleaned or replaced. If painting, think of refreshing the colors to a more neutral color. These efforts go a long way in polishing a home for market. Staging is also very important and making sure to de-personalize your home before listing. You want to be sure that potential buyers walking through the home could imagine themselves living there. We have our Compass Concierge program that we have leveraged to help many of our home sellers properly prep their home.

Mike Moghaddas

Compass

  • What are your thoughts on what the real estate market will do in 2023?

I think we will continue to see low inventory mainly due to owners holding tight while interest rates soar. With Washington’s strong economic growth and increasing population, I don’t see prices dropping much. Cash is king and if you don’t have to rely on a large loan, now is a great opportunity to buy. The biggest market determiner will be interest rates. I’ve heard some talk they may come down, we will see!

  • Any advice that you would offer a home buyer this year?

I always encourage buyers to get pre-approved as the first step. You’ll know what you can afford, and your offers will be stronger. I also like to dive deep into my clients’ needs and wants so I can save them time and stress and get them into the homes they should see. Things like schools, neighborhoods, commutes, noise levels and proximity to restaurants and shopping must be considered. Location matters as much as the house itself. It can be hard to find the perfect place, so I make sure clients don’t pass something that’s near-perfect because it doesn’t check every box. Another great thing about the 2023 market is that home inspection contingencies are back on the table. Get an inspection and do your homework so you aren’t finding flaws later. Lastly, stick to the budget. Owning a home is expensive and it’s easy to get excited when looking. If you give it time, you will find something that won’t leave you poor, and allows money for the other joys that life offers.

  • Any advice that you would offer a home seller in 2023? 

Hire an expert real estate agent that serves your area. Don’t overprice it! Pricing your home is the most important driving force to get it sold. If we get the perfect number on the first round, buyers will come and drive demand, sometimes even driving the price up. If we overprice, we lose buyers, leading to costly time on the market. If possible, a coat of fresh paint, a deep clean and tidying the landscape make all the difference. Make needed repairs too. I can’t say enough how important staging is. It leads to beautiful photography and gets people through the door. Make showings easy for prospects through open houses or scheduled times. The more people that come through the door, the higher probability of a profitable outcome. 

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