What developers are saying about the 2023 real estate market

By: Taro Chellaram /Real Estate Articles/Apr 26, 2023

What developers are saying about the 2023 real estate market

As we move into 2023, the real estate development and construction industry is poised for significant growth and innovation. As urbanization continues to drive demand for housing and commercial space, the industry is also adapting to changing needs and preferences of consumers.

According to the Construction Confidence Index by ABC, contractor morale continues to be positive as of November. Economist Zack Fritz reports that 60% of contractors plan to expand their workforce over the next six months, while only slightly over 10% anticipate staff reductions. Additionally, approximately 50% of contractors project sales growth, while around 20% predict a decline. FRED (Federal Reserve Economic Data) reveals a 19.5% YoY decrease in new privately owned housing units starting in the first two months of 2023. However, this decline is not necessarily negative news, as the upward trend in construction costs experienced in 2021 and early 2022 has reduced significantly. Developers were asked whether they observed any changes in deals repricing over the past three months. The results indicate that 47% of developers witnessed upward repricing, a decrease from 92% in March 2022; 21% reported downward repricing, while none did in March 2022; and 14% of developers noted no repricing, compared to 5% in March 2022.

When examining construction expenses, it can be noted that the cost of materials has declined from its high in early 2022. However, a significant decrease in construction costs is doubtful; rather, we should anticipate price pressure in 2023 and possibly 2024 before prices stabilize and begin to climb steadily. The recent turbulence amongst regional banks could increase uncertainty surrounding higher interest rates. This is likely to cause a shift towards a more onerous regulatory environment along with a tightening of loan availability. In many areas, the rate of rent rise has slowed or even reversed. Given the potential delivery of about a million additional rental homes, we anticipate this condition to continue until 2023. However, since there is still an imbalance between supply and demand, these new units will ultimately be consumed. Coupled with a decline in medium-term deliveries brought on by the current slowdown, rent growth will then resume in 2024 and carry on in the future.

Commercial construction is facing many headwinds during this time. Given the negative consequences of remote work, office development is anticipated to fall in 2023. The demand for physical stores is still being influenced by the rise of online purchasing.  This, however, may not entirely be a bad thing. According to leading reports, the need for data centers, a subsegment of the office construction market, will continue to grow in 2023 as a result of increased online purchasing and home-based employment.

While recession remains a remote probability, experts believe that if it does occur, it will be moderate. While we see a rocky short-term prognosis, it may be just what is needed to strengthen fundamentals over the long term and retain the risk-adjusted returns that drive the multifamily investment strategy. All in all, there are still numerous opportunities for growth and to turn a profit in 2023 and 2024.



This Is How Multifamily Real Estate Can Help The Retail Sector

Having a multifamily property in a retail center is beneficial for both the buyer and seller and the residents of the property. The demand for rental communities that offer combined spaces for living, working, and entertainment is on the rise.

Houston is the best real estate market for industrial spaces in the country as of 2023

Houston\'s industrial market has experienced impressive activity and has been recognized as the nation\'s top industrial market 2023.

Industrial development on the rise in Texas real estate 2023

Texas has become a place of choice for businesses because of its growing population. This growth has led to increased demand for commercial real estate development, specifically industrial development. This rise is set to continue until the end of 23

2023 Market Predictions in Commercial Real Estate

2023 commercial real estate predictions are here. Find out which is the best investment opportunities are best for you. Make money with commercial real estate.

How is crypto and blockchain changing real estate business and money making?

Cryptocurrency and blockchain technology is changing the real estate business in many ways. Real estate investing has started shifting to a digital and virtual space slowly.

Legal Victories Unleash Potential to Cut Property Taxes - Impact on Hospitality and more

Landmark Court Decisions Pave the Way for Lower Property Taxes and Intangible Asset Considerations

Purchasing Commercial Real Estate? Consider These 5 Things Before You Buy

Whether you are a seasoned investor, or you\'re researching for your first property there is always a certain risk factor that makes us hesitate before signing the dotted line.

How you can profit from investing in Texas wetlands

Wetlands are profitable investments if done right. Texas has multiple real estate investment options, including wetlands and you can get great returns on investment from them.

Stocks Or Real Estate? Which Is The Better Investment?

Want to invest and make money? We have listed out the pros and cons of the real estate market and the stock market so that you can decide if you want to invest in stocks or real estate.

Everything you need to know about capital gains tax and real estate investment

Capital gains tax is levied on the profits made when you sell property or sell investments owned by you. Here’s how you can be exempt from taxes along with the top tax tips for investors and property owners.


Instagram

@ tcgcrealestate

Subscribe Now! IT's Free

Stay up to date with all news coming straight in your mailbox.

Copyright © 2025 TC Global Commercial. All rights reserved.