MARKET & TRENDS
2023 FORECAST
Why Investors are Cautiously Bullish to Begin 2023 MORE FAVORABLE PRICING AT AUCTION, EASING INTEREST RATES, AND OTHER FACTORS HAVE SOME INVESTORS EYEING OPPORTUNITIES.
By Daren Blomquist
A fter pulling back on investment property purchases in the second half of 2022, Paul Lizell
a Florida-based real estate investor who has been buying properties pri- marily via online bank-owned (REO) auction for more than two decades. Results from an Auction.com buyer survey conducted in March tell a similar story: 87% of buyers surveyed said they expect their 2023 purchases to increase or remain the same compared to 2022. That’s despite the fact that 32% of the same
buyers expect home prices to decline in 2023, nearly twice the percentage that expected home prices to decline in 2022. Another 13% of buyers expect home prices to increase less than 2% in 2023. But the risk represented by a potential price decline has been mitigated in part by market-driven pricing adjustments, particularly for distressed properties sold at auction. “Over the past two months, we’ve been averaging about 15 deals per month, personally we’ve been picking up,” said Lizell, pointing out that he’s noticed REO asset managers have become more in- centivized to offload inventory in the last few months. MORE FAVORABLE PRICING Mortgage servicers selling prop- erties at both online REO auctions and live foreclosure auctions have adjusted pricing lower over the past year as the retail housing market ground to a near standstill, accord- ing to data from Auction.com. The average ratio of auction reserve price to estimated as-is market value dropped by 4 percentage points between February 2022 and February 2023 for online REO auctions. Com - bined with more conservative bidding on the part of investors like Lizell, that resulted in REO auction properties
has become “cautiously bullish” in early 2023.
“We’ve really shifted, and right now we’re very, very bullish, but cautiously bullish, too, because I don’t know what events are going to come in that could throw a monkey wrench into my plans,” said Lizell,
Cautiously Bullish Buyers
2022 BUYER SURVEY
2023 BUYER SURVEY
86% 87%
32%
17%
EXPECT FLAT OR INCREASING PROPERTY PURCHASE
EXPECT FLAT OR DECLINING HOME PRICES
42 | think realty magazine :: may – june 2023
Made with FlippingBook Online newsletter