If you’re thinking about buying or selling a home soon, you probably want to know what you can expect from the housing market this year. In 2022, the market underwent a major shift as economic uncertainty and higher mortgage rates reduced buyer demand. Additionally, slowed the pace of home sales, and moderated home prices. But what about 2023?
An article from HousingWire offers this perspective:
“The red-hot housing market of the past 2 ½ years was characterized by sub-three percent mortgage rates, fast-paced bidding wars and record-low inventory. But more recently, market conditions have done an about-face. . . . now is the opportunity for everyone to become re-educated about what a ‘typical’ housing market looks like.”
This year, experts agree we may see the return of greater stability and predictability in the housing market if inflation continues to ease and mortgage rates stabilize. Here’s what they have to say.
The 2023 forecast from the National Association of Realtors (NAR) says:
“While 2022 may be remembered as a year of housing volatility, 2023 likely will become a year of long-lost normalcy returning to the market, . . . mortgage rates are expected to stabilize while home sales and prices moderate after recent highs, . . .”
Danielle Hale, Chief Economist at realtor.com, adds:
“. . . buyers will not face the extreme competition that was commonplace over the past few years.”
Lawrence Yun, Chief Economist at NAR, explains home prices will vary by local area, but will net neutral nationwide as the market continues to adjust:
“After a big boom over the past two years, there will essentially be no change nationally . . . Half of the country may experience small price gains, while the other half may see slight price declines.”
Mark Fleming, Chief Economist at First American, says:
“The housing market, once adjusted to the new normal of higher mortgage rates, will benefit from continued strong demographic-driven demand relative to an overall, long-run shortage of supply.”
Jonathan Miller, President & CEO of Miller Samuels Inc. and author of the Elliman report states:
Let’s agree to refer to 2023 as the year of disappointment because:
- Sellers will be disappointed by not selling for what they would have received in 2021.
- Buyers will be disappointed by not seeing significant discounts on housing prices; which will impact their affordability.
As reported in the Commercial Observer:
In other words, as the market begins to tip toward purchasers. There’s a mismatch between buyers’ and sellers’ expectations and realities, said Greg Heym, chief economist for real estate firm Brown Harris Stevens.
“Sellers initially are always going to be reluctant [to lower prices],” Heym said. “The buyer is seeing everything slowing down, reading the national headlines. Showing even more dramatic declines in activity, the stock market coming off a bad year, and a recession. They’re looking for deals [and] they’re expecting to find them.”
Still, Manhattan’s housing market is likely in a stronger position to withstand turbulent economic times. That is because condo and co-op prices didn’t rise as rapidly or as high relative to other U.S. cities. And the borough’s inventory still grew when compared to 2021, Ryan Schleis, Senior Vice President of Corcoran said.
“Obviously, luxury buyers aren’t as concerned about interest rates because they usually pay cash, but they’re less likely to feel the urgency to buy,” Heym said. “It’s a time where people don’t have to make a move, will be very careful, and will have to see the value jump out at them.”
Key Takeaway
If you’re looking to buy or sell a home this year, the best way to ensure you’re up to date on the latest market insights is to partner with a trusted real estate advisor. Let’s connect.
Other educational articles about the market and your home search are under Karen’s Blog.
