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Residential Real Estate Experts Share 5 Trends to Watch in 2023

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Residential Real Estate Experts Share 5 Trends to Watch in 2023

Taylor Johnson’s housing experts share their insights and predictions for five trends that will shape residential real estate in 2023.

Taylor Johnson
November 29, 2022
Interior kitchen model at Tribune Tower, Chicago
The Mary Cook Associates (MCA) team curates model kitchens with predesigned packages of finishes in classic palettes to keep costs reasonable by limiting customizations, while also offering pleasing design. Photo courtesy Taylor Johnson. Credit: Mary Cook Associates

The past year brought a significant and welcome “return to normal,” as many resumed pre-pandemic—though slightly modified—routines around work, family life, school, and recreation. There was also a major shift in the housing market during the second quarter, with counter-inflation measures sparking a steep rise in mortgage rates.

So, what economic and lifestyle factors will hold sway in the coming year? Will 2023 be a time of recalibration? Taylor Johnson’s housing experts share their insights and predictions for five trends that will shape residential real estate in 2023.

5 Home Trends to Watch in 2023

Trend #1: Balanced Market Ahead

Sold home sign from Baird & Warner
As Illinois’ largest family-owned independent real estate company, Baird & Warner is looking to 2023 with a close eye on rising interest rates and low housing inventory. Photo courtesy Taylor Johnson. Credit: Baird & Warner

After a quick cooling of the for-sale market in 2022 amid rising mortgage rates, real estate experts have a pragmatic yet positive outlook about residential housing in 2023—particularly given a potential decrease in interest rates combined with elevated demand as buyers seek homes better suited to a post-pandemic lifestyle.

Trend #2: A Boom for Built-Ins

Morgante Wilson Architects built-in bench kitchen island
Morgante Wilson Architects (MWA) notes that while banquettes have long been one of MWA's favorite built-ins to include in kitchens and dining nooks, the firm is now using the feature in unexpected areas to create the multi-purpose spaces today’s homeowners prize. Photo courtesy Taylor Johnson. Credit: Werner Straube

From banquettes to buffets to benches, built-in elements that are space-saving, stylish, and functional are more important than ever as living spaces in 2023 will be expected to cater to a variety of lifestyle needs, accommodating more household members at home simultaneously and for longer stretches. 

Trend #3: Open ARMs — The Ballad of Rising Rates

Lexington Home exterior at night
With new-home inventory dwindling and interest rates rising in 2022, Lexington Homes brought back some tried-and-true financing tools to help homebuyers, including a 7-year ARM at a rate about one point below the 30-year fixed rate. Photo courtesy Taylor Johnson. Credit: Lexington Homes

In home financing, everything old is new again. With no immediate relief in sight for the rising interest rates that marked the second half of 2022, the new year will see a throwback to financing tools and incentives last seen during past markets when higher rates were a hurdle for buyers.

Trend #4: The Kitchen is King

Dining banquette in Chicago home interior
Amanda Mason, head of design at Belgravia Group, says while buyers are backing off the cooler grays that have dominated kitchen design in recent years, they are headed into 2023 still favoring the crisp, clean lines of a contemporary aesthetic. Photo courtesy Taylor Johnson. Credit: Belgravia Group

According to housing experts, the kitchen will continue to loom large as the room where buyers and owners are most likely to invest in upgrades, improvements, and must-haves. Topping the list for 2023? Expansive islands, multi-function pantries and other kitchen components—from appliances and cabinetry to finishes and color palettes—that maximize efficiency as well as enhance aesthetics.

Trend #5: Pools Rule

Residential pool in Highland Park, Illinois
Morgante Wilson Architects is continuing to see a surge in demand for pools at clients’ primary residences as well as vacation homes—even if the property is already located on a lake or other body of water. Photo courtesy Taylor Johnson. Credit: Mike Schwartz

A ripple effect of early pandemic lockdowns is the appreciation homeowners now have for at-home recreation amenities—especially a swimming pool. That’s resulting in a wave of homeowners and buyers deciding to take the home-pool plunge, even in areas with a shorter summer. Meanwhile, some residential developments and rental communities are planning year-round outdoor pools in four-season regions that experience full winters—making “open swim” possible all year long.

About Taylor Johnson

Taylor Johnson is a public relations and events firm 100% niched in real estate. We represent some of the industry’s most highly regarded companies – large and small, public and private, residential and commercial, and touching nearly every property sector.

Since 2006, Taylor Johnson has been distributing the Taylor Johnson Real Estate Trends Report, an annual compilation of our clients’ predictions for the year ahead in real estate. Broken into residential, multifamily and commercial editions, the report shares insights from experts across a range of real estate disciplines – from development, design and construction to brokerage, investment and finance – resulting in a robust forecast that examines the industry from multiple perspectives.

For more information on Taylor Johnson’s expert sources or to see previous Taylor Johnson Real Estate Trends Reports, please contact Sarah Lyons at slyons@taylorjohnson.com

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