The 2023 Amarillo economic forecast is detailing some slight changes from 2022. For a brief overview, it can be expected that supply chains can be expected to improve, loosening from the previous year. Labor will also follow suit, with less job vacancies and more available workers than in 2022. Inflation may slow down in 2023 (predictions estimate a drop to 6% or even below according to an article by Forbes.com). This will be dependent on how quickly the economy cools down from inflation.
The economic forecast for the real estate market predicts an increase in interest rates, yet again. Despite the expected decline of local inflation in Amarillo, the Fed will continue to battle nationwide inflation by hiking interest rates. In fact, it is predicted that the interest rate’s yearly average will be higher in 2023 than in 2022. It is no surprise that due to the increase in mortgage interest rates predicted in the coming year that home sales will be on the decline, but should return to pre-COVID (2019) levels.
Rural land is also expected to see fewer sales in 2023 as compared to 2022. The increase in interest rates is not exclusive to residential homes. The interest rates for land purchases will continue to rise, decreasing the demand for rural land, but do not expect to see a price cut. Land that is considered “lower quality” might see a price reduction, while higher quality properties will maintain a more consistent price according to a report by the Texas Real Estate Center at Texas A&M.
However, the outlook in the Amarillo area is much more positive than the state of Texas as a whole, as well as the predictions for the United States. Inflation is expected to stay elevated for the state of Texas as well as the U.S., whereas mentioned earlier, the Amarillo area is expected to see a decrease in average inflation. Despite the entire country seeing an average growth in employment, Amarillo is expected to see a significant, positive leap in employment. With the new employers in town including the new Amazon and Cocique facilities fully opening in 2023, employment opportunities are expected to increase, generating a more positive tick in the local economy.
Despite housing costs increasing, Amarillo locals should understand that there is a silver-lining to this. In this market, the average seller is moving for necessary reasons and therefore more motivated. This means buyers are in a prime position to ask for seller concessions. Sellers are willing to make a deal work by providing lucrative incentives, whether that is buying down points or offering closing cost assistance. Buyers will need less cash to close on a property no matter if prices rise or fall.
Even in the Great Recession of 2008 Amarillo was not affected to the catastrophic levels seen in some areas of the country. Based on the 2023 economic forecast for Amarillo, we can see that the impact of factors like inflation and unemployment are significantly less than the average of the United States and the state of Texas. Despite the overarching concern for the cost of living, there are still great and strategically sound methods to purchasing a home in 2023. To debunk a few myths, it should be mentioned that minimum down payments require only 0-5% and that buyers have to have tens of thousands of dollars in cash to purchase a home, is false. In most cases, homeownership is extremely accessible to most. For more information on the local forecast in other industries, Amarillo National Bank published a 2023 Economic Forecast for Amarillo.
If you are looking to list a home or purchase one in 2023, we are here to help. There are creative financial solutions that are available to explore to make purchasing a home possible. Message us to find out how we can help you sell your home or get into a home this year.