Is the Northern Virginia Housing Market Going to Crash in 2023?

Throughout 2022, you may have heard a number of people telling you that you should expect a crash in the Northern Virginia housing market this year. But despite all these bleak predictions, there is actually a lot less to worry about than you might think. Let’s take a look at why you may have heard the Northern Virginia housing market could crash, and why a slower, less dramatic decline may be more likely.

  • A Bubble About to Pop?
  • About the Decline…
  • The Possibility of a Market Crash
  • What You Can Expect for Northern Virginia

A Bubble About to Pop?

Economically speaking, the rapid rise in the market value of an asset—like real estate—is often described as a bubble. This idea of a bubble when referring to the current market conditions misleadingly implies that it will eventually pop. In this situation, most interpret “pop” as meaning a massive, dramatic, downward crash in the housing market. This is the scenario a lot of Northern Virginia residents have been gearing up for over the past year, and understandably so. Current prices in the Northern Virginia real estate market are significantly higher than they normally should be.

However, this doesn’t mean for certain that a crash is going to happen. Based on past trends and the way things are currently headed, we are expecting a slow, gradual decline in real estate prices in 2023, rather than a devastating market crash.

About the Decline…

Lower housing market prices are great for buyers but less than ideal for real estate agents and sellers. Currently in Northern Virginia, competition is high because there are so few homes on the market in the first place, and lower-priced houses will usually get offers very quickly. Your main takeaway should be this: If you’re planning to sell your home this year, there is no better time than now to get your home on the market while demand is high and prices are higher.

The Possibility of a Market Crash

Even though most of the signs aren’t pointing to a market crash in 2023, it’s not always possible to make perfect predictions about the market. With the right conditions occurring at the right time, an unexpected crash could happen, and it might be a good idea to prepare for the worst, even when it isn’t likely. Here are a few factors to watch out for which could lead to a crash:

Unemployment

Unemployment rates don’t affect much when they go up by a small amount, but a big upward shift in unemployment rates could drag the housing market down. If a lot of people are without jobs, they may end up frantically trying to sell their houses, and foreclosure numbers could rise.

Homebuilding

When it is thriving, homebuilding leaves more desirable houses on the market. However, during the pandemic, many builders struggled with rising material prices and increasing difficulty in obtaining building permits. This can lead to a shortage of homes for sale, which causes prices to rise as they have recently. We are already expecting a continuation of this slow progress in the new-home market in 2023.

Buyer Demand and Motivation

These are arguably the two most important aspects of the housing market in Northern Virginia. After all, if no one is buying houses, the market wouldn’t exist at all. It would be a very bad sign if the public’s demand and motivation to buy houses started to drop suddenly.

What You Can Expect for Northern Virginia

In the coming year, we think you should expect to see a gradual decline in housing prices. While this might sound scary, remember it is nothing to worry about! Prices have skyrocketed in Northern Virginia recently, and they will simply be sinking back to normal market value.

And if you’re thinking of selling your home or buying a new one, there is no one better to help you than our team, Reynolds EmpowerHome Team. We’ve helped thousands of families through dramatic market shifts, and we have decades of experience navigating the changing markets, so you can rest assured that we can get your home sold regardless of whatever the 2023 markets have in store. Most sellers last year had to call a second or third agent to get the job done, or even worse, not sell at all. The agent you hire the first time matters! Our team sells 98% of our listings the first time, so when you hire us, your home is more likely to sell fast & for top dollar! 

Call or Text us now at 571-464-8883 to start working with a team that will help and support you every step of the way!

Your Home SOLD for 100% of the Asking Price or We Will Pay You the Difference.* No Gimmicks! Visit us HERE for more information.