What Are Home Buyers Looking for in 2023?

It’s been a wild ride in real estate since the start of the COVID-19 pandemic in 2020, from lockdowns that made homeowners reassess their spaces as they worked from home to soaring prices that priced many first-time buyers out of the market and had sellers feeling buoyed. Now, with rising interest rates, inflation and return-to-office mandates, REALTORS® are observing further shifts in the real estate market across the country as we head into 2023.

Multi-generational living

One trend REALTORS® are noticing is an increase in multi-generational living, a pattern that’s likely to continue.

For Katherine Minovski, a REALTOR® and broker in Unionville, Ontario, cost savings are the big driver for different generations living under one roof. In these unstable economic times, it helps to have more people paying into the mortgage and splitting living costs, she says.

Another reason is to have family around for support, whether that’s for childcare or elderly parents with health issues. Multi-generational households can also offer new immigrants cultural, social, and economic support as they establish themselves in a new country.

“I am seeing families who want larger homes, but can’t afford it, pooling their money,” she says. Often a baby boomer parent might seek out a property with a walk-out basement or separate apartment. “I’ve seen buyers looking for land to build a multi-generational home. Land is expensive, so others are doing renovations.”

According to the 2021 Census, there are 442,000 multi-generational households in Canada (2.9% of all households), an increase of 50% since 2001. The population is aging, and life expectancy is rising, meaning more people have parents alive today. In 2021, almost one in five Canadians were 65 or older (19% of the population), up from 13% in 2021.

On the move

Other consumer patterns REALTORS® are noticing include where people are gravitating to and the types of homes they’re seeking.

“I am seeing buyers looking more for townhomes, more affordable properties,” says Sasha Raimova, a REALTOR® and associate in Calgary, Alberta.

The trend of moving out of the city and more into the suburbs, or into vacation properties, has reversed itself, says Karen Yolevski, chief operating officer of Royal LePage Corporate Brokerage. 

“We did see people move out to the suburbs and beyond into cottage country during the pandemic but … people [are] coming back,” she says. “That’s being driven by how business is reacting. Many companies that went completely virtual are now going hybrid or, in some cases, back to office completely. So, for those employees who are going back, even two to three days, it creates a situation where they’ve got to fight more traffic, pay for gas that’s gone up in price …. People are re-evaluating coming back, which we have seen particularly in our large urban centres. People are making the life choices between a bigger house in the country with lots of greenspace versus time and traffic, the general time spent commuting, the distance from work and amenities.”

As the country moves past the frenzy of the hot sellers’ market we have seen over the past while, buyers are now increasingly using their leverage and seeking out deals. What they’re looking for falls into two camps, according Yolevski: a fixer-upper that’s lower in cost and which buyers see as a way to increase the value of the home; and turnkey properties for those who are cognizant of higher costs in labour and supplies.

Move-in ready

Out east, buyers are preferring move-in ready homes, says Jacqui Rostek Holder, a REALTOR® and salesperson in Halifax, Nova Scotia.

“I am seeing buyers who are looking to upsize their homes still, often ones who were not able to during the frenzy of the pandemic market,” she says. Their wish list often still includes space for a home office. “Due to increasing costs, I am also seeing people seek both multi-generational homes as well as homes that would accommodate a renter or boarder or that will keep their children in longer.

“I personally find yard space a very individual desire. Some people are so busy that their lifestyle doesn’t accommodate being in their yards and so a larger one is a chore. Across all price points and styles, cosmetic updates/upgrades are appreciated and valued. That’s where I see the most competition.”

Alexandru Bejinariu, a REALTOR® and broker in Toronto, also sees a focus on renovated properties.

“We find buyers value renovated properties and seek out properties which can provide additional income by having a basement unit to rent out,” he says. “Laneway access is desirable for this purpose as some lots support a secondary structure for income purposes. Buyers are in a great position to bargain and we find that they also value a discount when buying. They’re likely to compromise on some must-have features in favour of obtaining a great purchase price.” 

2023 forecast

In the final forecast of 2022, CREA’s team of economists said national homes sales were forecast to edge back a further 2.3% to 520,156 units in 2023. The national average home price was forecast to slide mostly sideways (+0.2%) in 2023 to about $722,000.

What trends are you seeing in your market? Let us know in the Comments below.