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What Real Estate Investors Must Know About Market Trends in 2023

Despite the U.S. economy appearing to enter a recessionary period, the early days of 2023 are seeing continued job growth and historically low unemployment claims. When you couple this with an increase in home prices in certain areas, many economists are left scratching their heads at this 'most peculiar' downturn. Gross National Income has been on the rise as well, indicating that there may be flaws underlying how we measure our economic output today - making it difficult for officials to accurately gauge what lies ahead for America's financial future.

As a Groundfloor investor, it is essential to be up-to-date on market trends in the real estate industry. By understanding market trends, you can make informed investment decisions that will help you maximize your return on investment. In this blog post, we'll discuss some of the most important market trends that we see at Groundfloor. As well as what every real estate investor should think about when it comes to investing. 

The Current State of the Housing Market in 2023 and Beyond 

The housing market is continually evolving and, in recent years, has been increasingly volatile. Today, homes are often housing multiple generations as people delay buying their first house for various reasons, such as student loan debt or the high cost of living in certain cities. Renting is becoming an increasingly popular choice as rates have gone up along with rental prices being driven up due to housing shortages in many areas. Affordable housing continues to be a pressing issue that affects all members of society, from low-income families to young professionals attempting to find a place of their own.

Homeowners and investors can look forward to the upcoming years being an exciting time for remodeling! In 2027, nearly 24 million homes in America will enter their "Prime Remodel" phase – a period of meaningful renovation and improvement projects. This is an unprecedented surge in home activity since 2021 when homeowners had never refurbished more than 21 million properties before then!


Renters are feeling the pinch of a housing market that continues to become increasingly less affordable--17% fewer tenants made their move into homeownership this year compared with two years prior. As prices rise, renters find themselves stuck in rental homes as they wait for more viable buying options.

Though challenging for buyers and sellers alike, this housing market has the potential to become much more stable if appropriate action is taken and factors are considered.

What to Look for When Analyzing Housing Market Trends

Analyzing market trends is an important aspect of any financial plan. When analyzing housing market trends, it's critical to look for factors such as housing supply and housing demand – if the housing supply is lower, the demand and price may be driven up; conversely, if the housing supply is higher, prices should drop. It's also important to pay attention to housing affordability ratios and how they affect housing prices – typically this ratio should remain manageable in order for housing prices to remain stable. We follow this chart closely. 

Other useful signs include housing starts and building permits – an increase could indicate a surge in housing prices. Ultimately, by understanding the forces at play in the housing market, investors can stay ahead of trends and take advantage of growth opportunities.

If you’re an investor looking to get into the real estate market, it’s important to know what to look for when analyzing housing market trends. There are a few key indicators that can give you an idea of where the market may be headed in the future and help you decide on which properties to invest in. Let's take a look at some of these indicators.

How Groundfloor Can Help You in 2023

An important differentiator for Groundfloor is that we allow our customers to invest and build their portfolios on your terms. We give all investors the opportunity to invest in all properties on our platform. 

The letter/risk rating comes from 5 key factors that determine how risky the loan is. Most heavily weighted by borrower experience. Also skin in the game from the borrower. How much we’re lending relative to the after-repair value or exit price.

Our auto Investing allows you to input the maximum amount you want to invest in any loan by letter grade, and the tool will automatically invest available funds in your account according to this criteria. This is less customizable but the lowest-touch way to invest. Invest a certain amount in each grade of the loan and set and forget.

When Groundfloor underwrites a loan, our proprietary grading algorithm assigns one of seven letter grades from A to G to each project. The letter grade generally reflects the overall risk of the loan. 

The grading algorithm factors in the following indicators that take into account:

  1.  The valuation and strength of a particular project
  2. The experience and risk profile of the borrower. 

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Supply/Demand, Income Levels and Location for Real Estate

One of the most important factors in determining how any given real estate market is performing is supply and demand. If there is high demand for homes but limited supply, then prices are likely to go up as buyers compete for available properties. On the other hand, if there is abundant supply but low demand, then prices will go down as sellers compete for available buyers. It’s important to keep an eye on local supply and demand levels so you can make informed decisions about which properties might be worth investing in.

Another important factor to consider when analyzing housing market trends is income level. If income levels are rising, people will have more money available to spend on housing, which could lead to increased demand and higher prices. Conversely, if incomes are falling or stagnant then people may not be able to afford as much housing and prices could drop. It’s also important to consider how much money people have left over after paying their rent or mortgages—if they don’t have much disposable income left over after paying their housing costs then they won’t be able to purchase additional homes or condos in the area and this could lead to lower home values overall.

One of the most important things to consider when analyzing housing market trends is location. Different areas have different trends and prices, and these can change rapidly depending on the local economy and other factors. When looking at potential investments, always research the area carefully before making any decisions. Consider factors such as cost of living, population growth, job prospects, crime rates, and property taxes.

How to Make Money in a Changing Housing Market

As the housing market changes, it can seem daunting to make money amid such volatility. However, savvy investors can use this shifting landscape to their advantage. With access to the right advice and tools, including good research on potential investments, one can harness trends in housing markets for long-term financial gain. Additionally, by investing with Groundfloor in other housing-related areas you can see great returns.  The key lies in having a depth of knowledge and flexibility to react quickly when circumstances shift. With dedication and understanding, one can indeed turn challenges into profitable opportunities.

The housing market is constantly changing. Just when you think you've figured out the perfect investment strategy, something else shifts and you're back at square one. With all these changes, it can be difficult to determine how to make a profit in this ever-evolving industry. But don't worry! Here are some tips on how investors can stay ahead of the game and make money in a changing housing market.

Identify Emerging Markets

Investing in emerging markets can be an excellent way to generate returns in a changing housing market. These markets often have untapped potential for growth and offer investors higher returns than established markets due to their less saturated nature. However, it’s important to do your research before investing as there is always risk involved with any real estate venture. Look for areas with low vacancy rates, high rental yields, or increasing property values as indications of potential investment opportunities.

NAR Identified the Following Top 10 Real Estate Markets to Watch in 2023

  1. Atlanta-Sandy Springs-Marietta, Ga.
  2. Raleigh, N.C.
  3. Dallas-Fort Worth-Arlington, Texas
  4. Fayetteville-Springdale-Rogers, Ark.-Mo.
  5. Greenville-Anderson-Mauldin, S.C.
  6. Charleston-North Charleston, S.C.
  7. Huntsville, Ala.
  8. Jacksonville, Fla. 
  9. San Antonio-New Braunfels, Texas
  10. Knoxville, Tenn.

NAR explored a few select markets with attractive features that make them stand out from the crowd. These locations offer more affordable housing, growing job opportunities and an expanding population of renters who are able to transition into homeownership. In addition, there's been an uptick in available homes on the market easing any potential shortage issues while still meeting current demand levels. 

NAR chart of top 10 market to watch in 2023

Look for Bargain Properties

One of the best ways to make money in a changing housing market is by finding bargain properties that have been overlooked by other investors. By doing so, you can get great deals on properties that may have been previously overpriced. Look for homes that have been sitting on the market for longer periods of time or that need repairs but have good underlying fundamentals such as location or size that could be fixed up quickly and easily at low cost. Investing in these types of properties can give you an edge over other buyers who may not be willing or able to take advantage of these opportunities. Groundfloor can help you with borrowing for these properties. 

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Property Shark is a great tool for this! You can check it out on your own

Look for Foreclosures & Auctions

Foreclosures are often a great way to find bargain home properties since banks and other lenders typically want to unload them quickly and will often accept less than market value for them. However, foreclosures come with their own set of risks and challenges, so it’s important to do your research before committing to one. Make sure that you understand the condition of the property, including any necessary repairs that may need to be made before it is livable or rentable. You should also make sure that all taxes and liens are paid off before purchasing a foreclosure property. 

Auctions can also be a great place to look for bargain home properties, although they require careful research and preparation beforehand. Before bidding on any auctioned property, you should carefully review all documents associated with it, such as title documents and inspection reports. You should also make sure that there is no pending litigation related to the property prior to bidding on it. Additionally, make sure that you understand all terms associated with the auction process and that you have enough funds available for closing costs if necessary. 

Tips for Real Estate Investing in a Down Market

Despite the current housing market, real estate investing could still be a great opportunity. The key to success is to find financially sound investments that can withstand a down market. Researching the neighborhood housing trends and home values in an area is an essential step for any investor looking to profit from this market. Additionally, having patience and persistence when navigating through a down market will be crucial as housing prices may take some time to bounce back up. Overall, investors need to remain diligent and proactive when considering real estate investment opportunities. Groundfloor is here to help with your investments too!

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As a real estate investor, it’s important to stay up-to-date on market trends so you can make informed decisions about when and where to invest. The current state of the housing market is ever-changing, but there are certain indicators you can look for that will tell you what direction the market is headed. By understanding how to read these indicators, you can make money in a down market by finding undervalued properties and selling them for a profit. Keep these tips in mind the next time you’re considering investing in real estate and be sure to contact us if we can help you get started. Contact us if you have more questions about Groundfloor investments! 

Clinton Dugan

SR. Organic Growth Manager

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