What Will Happen With Real Estate in 2023?
Deep Dive Into the 2023 Real Estate Market
We're looking at recession, price appreciation and mortgage rates. Let's go!
A Recession Doesn't Mean Home Prices Will Fall
What's the impact of a recession on home prices? A recession doesn't mean home prices will fall.
We all remember what happened in 2008, and the words “recession” and “housing bubble” immediately bring back memories of the crash. However, there are big differences between today’s market and the ones leading up to the crash. Here are the reasons today is nothing like the last time.
Before the Great Recession, the housing market had:
- Loose lending standards
- An oversupply of homes
- Overtapped equity
Today’s market looks the opposite with:
- Stricter lending practices
- An undersupply of homes
- More equity
In fact, in four out of the last six recessions, home prices still appreciated. The truth is: while the housing market may look different than the frenzy we saw in previous years, that market wasn’t sustainable and we are returning to what a “normal” market looks like.
Price Appreciation is Moderating, But, Perspective Matters
There’s no doubt today’s economic uncertainty is leaving many wondering: What will happen with real estate in 2023? Today, we are discussing price projections with Hank Saye of Saye Triangle Realty Group.
Home prices month over month have depreciated for the past four months on record, but there’s a strong case to be made that the worst may be behind us.
Expert forecasters aren’t calling for a free fall in prices. In fact, if you look at the latest data, we believe it indicates the biggest portion of month-over-month price depreciation nationally may already be behind us – and even those numbers weren’t significant declines on the national level.
Looking at the Triangle, we see the same trend. The median sales price declined approximately 5 percent from June to Sept. From Oct. through Jan., the decline in median price was approximately 2.5 percent.
Instead of how far will they drop, the question becomes: Have home values hit bottom?
Looking at the data, we can see this month-over-month change. It may not confirm that depreciation is behind us, but it does confirm prices aren’t in a free fall and may be an early signal that the market is actually turning around - again!
Mortgage Rates Have Peaked
Many experts believe mortgage rates have peaked. I will not intentionally mislead you and frankly this one is hard to predict.
Trying to time the housing market perfectly is a bit like playing the lottery.
While we can never truly foresee what’s going to happen, we can keep you up to date on the latest insights, especially in a shifting market.
We have regularly seen mortgage rates at or slightly below 6 percent for well qualified buyers under certain conditions. Several of my partner lenders believe rates will continue to trend downward and predict rates to be in the 5 percent range later this year.
And the truth is, with the current unpredictability of mortgage rates - and experts predicting continued home price appreciation - making a move sooner may be the better financial decision. In addition, we have numerous strategies to mitigate what are perceived as high interest rates.
Call us, and we will help you connect with a great lender based on your needs.
If you would like more details or unbiased free information on the Triangle real estate market please give us a call, text or email.
📞💬 Hank at 919-348-1588
📧 [email protected]