2023 will be challenging for Chicago homebuyers, experts say

Local experts predict mortgage rates, which hover above 6%, will shape our real estate market in 2023, reports Axios' Sami Sparber.

• Here's what they're saying:

There will be a resurgence toward city living

More favorable and level interest rates will help normalize the market, predicts Matt Silver, partner and senior broker with Corcoran Urban Real Estate.

• If coupled with a steady return to offices and low COVID-19 levels, this could "spur the rebirth of the Loop," Silver tells Axios.
• Those market shifts could boost sales volume and help stabilize prices, says Silver, president-elect of Illinois Realtors.

Conditions will test buyers

A lack of inventory, along with higher interest rates, could make the year challenging for homebuyers, predicts Rich Kasper, founder of The Kasper Group.

• "Today's first-time buyers knew nothing of interest rates above 6 or 7%, so the shock of what that equates to on their monthly payment will need to be digested," Kasper tells Axios.

Meanwhile, homeowners who have locked in a favorable rate are reluctant to sell, Kasper says.

More first-time buyers will enter the market

Pent-up demand among first-time buyers will activate in the first quarter, predicts Tommy Choi, co-founder of Weinberg Choi Residential. A large group of future first-time buyers are still living with their parents, Choi says.

• As these young professionals move into a hybrid or fully in-person work environment, Choi foresees them "jumping straight into homeownership."
• That's because of rising downtown rental prices and "how much money this group has saved for a down payment by living at home," he tells Axios.

Yes, but: Chicago renters earned just 69% of the income they would need to afford a starter home, per October figures.