RISING PRICES Prices are expected to rise during the next decade. As more people move into cities and seek housing options, demand will outpace supply and prices will continue to increase. In many areas, real estate prices have doubled or even tripled during the past decade alone. FORECLOSURES AND EQUITY Foreclosures are very low, and the majority have equity. According to ATTOM, less than 1% of homes are in foreclosure, a fraction of the 4% of properties in foreclosure at the height of the 2008 housing crisis. Of the homes that are in foreclosure, 93% have equity. Because of that, a homeowner who is behind on mortgage payments could sell the property and potentially walk away with cash. There is basically little chance of a repeat of 2008. MIDSIZE MARKETS The midsize markets, which experienced smaller price hikes and less of an affordability crisis than others, will experience the most gain in home sales and listing prices in 2023. Because of the high cost of real estate, buyers from the Northeast and the West lead the list of people looking for inexpensive homes outside their current area. THE NORTHEAST The Northeast leads the way in cross-market house shopping, with 69% of homebuyers looking at properties in other markets, notably from pricy markets like New York and Boston. In the West, which includes equally costly metros such as San Jose, San Francisco, Los Angeles, and Seattle, 66% of homebuyers looked at properties in other markets. HOUSING SUPPLY According to the National Association of Realtors, a healthy housing market typically has a supply of four to five months. In November, the country had a 3.3-month supply of homes. That puts us in a mild seller’s market. HOMEOWNERSHIP RATE The homeownership rate in America is expected to hold steady, ticking down to 65.7% in 2023. The average homeowner’s equity is expected to increase by $25,650. Those in lower-cost areas of the country may benefit even
Home prices should largely hold in 2023, and price appreciation will either be constant or show a little uptick, depending on the market. There will be no large price gains this year, and it is highly unlikely you will see property values “crash” across the country. Some markets will see price declines, however, (e.g., Seattle, Austin, Utah, and Phoenix) because of the massive boom during the pandemic. You likely won’t see most of these markets drop back to their pre-COVID price levels though. Keep an eye out for the following housing trends. DEMAND FOR HOUSING NOT DYING In every market, there’s a growing demand for housing and commercial real estate. Depending on who you ask, experts believe there is a nationwide housing shortage of between 2 million to nearly 6 million newly built homes.
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