The growing coastal city of Newport Beach, CA, has become one of the hottest spots in southern California. Tucked away near the sea, this Orange County gem has long been a draw for tourists who want to find the beach vacation of their dreams. The demand for available housing has been high in both the rental and sales markets, driving up median rents and home prices to levels far beyond the national averages. With the housing market setting historic highs and interest rates increasing over the past 18 months, what does the future hold for the Newport Beach, CA, real estate market? Read on for an expert evaluation of the forecast.
The national forecast for the remainder of 2023
The high demand and low available supply of homes led to historic rises in the median home prices across the United States, beginning in the early days of the 2020 COVID-19 pandemic. As median home prices began to soar, inflation began to take its toll on the economy. In an effort to battle both inflation and rising home prices, the Federal Reserve began to increase interest rates. After home prices hit their record high in June 2022, the market began to feel the effects of the rate increases. Median home prices dropped year over year for the first time since before 2020, CNN reported in May 2023.
However, the effect on the housing market was not as long-lasting as forecasters once believed it would be. With the demand for available housing still high and the supply remaining low, even the higher interest rates couldn’t cool the market down for very long. This has been especially true in popular housing markets like that of Newport Beach, CA.
What the national numbers mean for the real estate landscape in Newport Beach
Newport Beach remains a strong sellers’ market, even after the rate hikes by the Federal Reserve. After record-high median home prices in Orange County in the spring of 2022, prices began to drop in the following months in response to the rate increases. That said, this drop has shown to be short-term. The median home prices began to increase again in December 2022, with the median home prices flirting with a new record high to date. In fact, as of August 2023, the median price of Newport Beach homes was $4.33 million, which represented a 15.8% increase over the previous year. Existing home sales were also up by an impressive 11.5%, with most homes spending just a month on the market before selling.
The market forecast for the remainder of 2023 includes interest rates ticking up, but that won’t necessarily translate to a substantial cooling of the market in Newport Beach. In addition, if Morningstar’s prediction of falling interest rates beginning in early 2024 holds true, more and more buyers will become interested in investing in the real estate market, possibly driving up home prices in Newport Beach even further.
What you can expect as a seller of Newport Beach real estate in 2023
If you’re a seller in the Newport Beach market, you might be conflicted on how to best time your sale for maximum returns on your investment. On the one hand, the market forecast for 2023 is calling for interest rates to continue to increase. If this makes demand slip even slightly, it could reduce the median home prices by a slight margin. On the other hand, if demand remains as high as predicted, the continued rate hikes might not impact the price you’d get at closing.
Your best bet as a seller in this market is to consult with a real estate professional who is highly familiar with the Newport Beach housing scene. A seasoned professional will be able to expertly market your listing to qualified buyers, saving you a lot of time and stress, as well as creating a possible scenario where you have multiple prospective buyers trying to outbid one another. This translates to more competitive offers and a higher closing price.
How the Newport Beach real estate market forecast will impact buyers throughout the rest of 2023
As a buyer in the Newport Beach, CA, market, you might be experiencing some hesitation with prices soaring upward and interest rates remaining high. If you believe that interest rates will start to drop in 2024, you might be thinking that holding off on your real estate purchase is the best move. After all, you’d be saving a lot of money in interest payments if the rate dropped by even 50 basis points. However, the sooner you buy, the sooner you can begin building equity in your home. Plus, if those interest rates do ultimately drop next year as predicted, you can always refinance in the future. That’s a win/win. Determining the right buying strategy is truly a balancing act that necessitates financial prowess, thorough planning, and expert guidance.
Ready to make a move in Newport Beach real estate?
The decision to buy or sell real estate in any market should be carefully considered. Whether you are a buyer or seller, you want to have a proper strategy led by a real estate expert on your side. Your agent’s exceptional market insight and top-tier negotiation strategies will go far in making your transaction smoother and more successful. If you’re hoping to make waves in the Newport Beach real estate game, reach out to Brooks Bailey Group for the guidance you seek. This trusted team has years of experience helping both buyers and sellers in Newport Beach, CA, and has emerged as one of the leading professionals representing luxury property in the area. Consider a consultation with Brooks Bailey Group today.
*Header photo courtesy of Shutterstock
