Over the last few months, we have become little more than accustomed to the generally upward variation in prices.
It is enough to see how the price of our shopping basket has changed to understand how we are in a bull market.
In this context, we have been hearing for months about the change in house prices, with predictions of what may or may not happen in 2023.
In today’s article, we will try to summarise the main factors that can influence the real estate market in situations of uncertainty such as the current one.
How could the real estate market develop in the short term?
Not a day goes by when we hear a news item that speculates on what may happen in the real estate market over the next few months or even years.
In this sense, there are many professionals who, knowing the sector and the factors that make it “volatile” to a certain extent, interpret the factors that may mark the changes that will take place in the housing market.
In the event that we find ourselves in a situation in which we are considering buying or selling a property, it is advisable to pay attention to the following factors that can mark the prices of the market over the coming months.
- Current cost of living
As we have mentioned, we are in a situation where both prices and the cost of living are getting higher and higher. The same goes for interest rates. All this has a direct impact on the cost of housing and the real estate market.
So, rising prices have also made the buyer a much more demanding buyer with new buying habits, and attention is being paid to many details that may have been overlooked in the past.
From the sustainability of the buildings, to the energy efficiency measures subject to the law from which we can obtain important tax benefits, even to the materials that make up the house, looking for materials with great durability.
All these factors are increasingly valued by buyers, as a warning to property developers, and have an increasing weight in the decision-making process before a purchase.
- Current real estate market supply
One of the most unbalancing factors observed in recent years in the real estate market has been a certain shortage or limitation in the supply of homes for sale. In general, we have encountered a phenomenon whereby demand has been higher than supply, a fact that has traditionally favoured the seller.
With the rise in interest rates and inflation, many theories lead us to believe that there may be a stagnation that will equalise this imbalance between supply and demand.
Furthermore, it is a reality that for some years now, there has been an increase in foreclosures, which could mean a new housing market in the medium term.
However, a radical or rapid fall in house prices is not expected, but rather a slight adjustment in prices over the coming months.
- Change in buyers’ preferences
We know that the pandemic marked a before and after in housing buying habits. After the confinement we experienced a situation in which there was an increased interest in large, spacious homes with gardens, often resorting outside urban centres.
The recovery of the situation and the return to normality seems to indicate that the buyer is returning to pre-pandemic habits, so it seems that interest in housing in urban centres, close to jobs, will increase again, which will lead to variations in the prices of this type of housing.
- Buying before renting or the other way around?
For many buyers, the price of housing is still unattainable today, although, as we have seen, the possible increase in the supply of housing and the stagnation of price increases can be an important and beneficial factor.
However, even an increase in purchase transactions may have a direct impact on the rental market, a fact that must be taken into account.
