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Real Estate Housing Market in 2023: Trends and Insights

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Real Estate Housing Market

The real estate housing market is a complex and dynamic industry that is constantly evolving. While the future is unpredictable, current trends can provide insights into what we can expect in the housing market in 2023. In this article, we will discuss the key trends that are expected to shape the housing market in the coming years, along with the potential impact of each trend. The housing market is predicted to slow down further in 2023. For sellers, this could be terrible news, but for buyers, it's great.

Yet, there is still the problem of sky-high mortgage rates. The bright side is that if buyers hold off, the supply of homes will increase, putting further pressure on sellers to decrease prices. This would constitute a long-overdue course correction for the housing market. Mortgage rates are skyrocketing. Home sales are declining. Supply is improving. We are witnessing a sharp slowdown in the housing market due to higher mortgage rates.

Trend #1: Increasing Demand for Affordable Housing

The demand for affordable housing is one of the most pressing issues in the housing market. The rise in housing prices, combined with stagnant wages, has made it difficult for many individuals and families to find safe and secure housing. In 2023, it is expected that access to affordable housing will continue to be a challenge. Innovative solutions will be necessary to address this issue and provide affordable housing options for those in need.

Trend #2: Shift toward Suburban and Rural Areas

The COVID-19 pandemic has caused many people to reevaluate their living arrangements, with larger homes and more space becoming increasingly important. This shift in priorities could result in a greater demand for housing in suburban and rural areas, leading to higher prices. This trend is expected to continue in 2023, especially as remote work becomes more prevalent.

Trend #3: Rising Home Prices

Despite the economic impact of the pandemic, housing prices have continued to rise due to limited supply and high demand. While this is good news for homeowners, it could make it more difficult for some individuals to enter the housing market. The trend toward rising home prices is expected to persist in 2023, particularly in urban areas where the supply is limited.

Trend #4: Stricter Mortgage Standards

As the economy recovers and interest rates rise, mortgage lenders may become more cautious about who they lend to. This could make it more difficult for some individuals to qualify for a mortgage and realize their dream of homeownership. Stricter mortgage standards are a potential barrier for those seeking to enter the housing market.

Trend #5: Increased Investment in Technology

The pandemic has accelerated the adoption of technology in the real estate industry, with virtual home tours and digital transactions becoming more common. This trend is expected to continue in 2023, with technological investments helping to streamline the home buying and selling process. Technology could also play a role in addressing the challenge of affordable housing, with innovations such as modular homes and 3D printing.

Hence, the housing market in 2023 will be shaped by economic, social, and technological factors. While predicting the future is never easy, understanding these trends can help individuals and policymakers make informed decisions about the housing market. It is important to address the challenge of affordable housing, as well as the potential barriers to homeownership such as rising home prices and stricter mortgage standards. Technological innovations are also likely to play a critical role in shaping the housing market in the coming years. By keeping these trends in mind, stakeholders can work towards creating a housing market that is equitable, accessible, and sustainable for all.

Housing Market Report for February 2023: Sales Rebound with Record Increase

The housing market made a comeback in February 2023, according to the National Association of REALTORS® (NAR), as existing-home sales surged 14.5% to a seasonally adjusted annual rate of 4.58 million. The report shows that the housing market rebounded after a 12-month slide, with all regions registering a month-over-month increase in sales. However, year-over-year sales were down 22.6%.

Inventory and Supply

The report reveals that the total housing inventory at the end of February was 980,000 units, unchanged from January but up 15.3% from one year ago. Unsold inventory sits at a 2.6-month supply at the current sales pace, up from 1.7 months in February 2022, but down 10.3% from January 2023. NAR Chief Economist Lawrence Yun commented on the inventory, saying that “inventory levels are still at historic lows. Consequently, multiple offers are returning on a good number of properties.”

Home Prices

The median existing-home price for all housing types in February was $363,000, representing a decline of 0.2% from February 2022. However, prices climbed in the Midwest and South while declining in the Northeast and West. The report shows that this ends a streak of 131 consecutive months of year-over-year increases, the longest on record.

Days on the Market

Properties remained on the market for an average of 34 days in February, up from 33 days in January and 18 days in February 2022. Fifty-seven percent of homes sold in February were on the market for less than a month. The increase in the average number of days that properties remained on the market in February 2023 compared to the same period in 2022 indicates that the housing market has shifted from a seller's market to a more balanced or even a buyer's market.

A seller's real estate housing market occurs when there are more buyers than available homes, which drives up prices and leads to faster sales. In contrast, a buyer's market occurs when there are more homes available than buyers, which can lead to longer selling times and lower prices. However, the fact that 57% of homes sold in February were on the market for less than a month suggests that demand is still strong for many properties.

First-Time Buyers and Cash Sales

First-time buyers were responsible for 27% of sales in February, down from 31% in January and 29% in February 2022. The report shows that all-cash sales accounted for 28% of transactions in February, down from 29% in January but up from 25% in February 2022. Individual investors or second-home buyers, who make up many cash sales, purchased 18% of homes in February, up from 16% in January but down from 19% in February 2022.

Single-Family and Condo/Co-op Sales

The report reveals that single-family home sales increased to a seasonally adjusted annual rate of 4.14 million in February, up 15.3% from 3.59 million in January but down 21.4% from the previous year. The median existing single-family home price was $367,500 in February, representing a decline of 0.7% from February 2022.

Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 440,000 units in February, up from 410,000 in January but down 32.3% from one year ago. The median existing condo price was $321,000 in February, an annual increase of 2.5%. Distressed sales, which include foreclosures and short sales, represented 2% of sales in February, almost identical to last month and one year ago.

Regional Breakdown: How Existing-Home Sales Fared Across the US in February

Let's take a closer look at how existing-home sales fared in each region of the country in February.

Real Estate Housing Market in the Northeast

Existing-home sales in the Northeast increased by 4.0% in February, with a seasonally adjusted annual rate of 520,000 units. However, year-over-year sales were down by 25.7%, reflecting the impact of the pandemic on the housing market. The median price in the Northeast was $366,100, down 4.5% from the previous year, indicating a slight decline in prices. Despite the decline in prices, the Northeast housing market is still struggling to recover from the pandemic, with low inventory and fewer first-time homebuyers.

Real Estate Housing Market in the Midwest

In the Midwest, existing-home sales rebounded strongly in February, growing by 13.5% from the previous month to a seasonally adjusted annual rate of 1.09 million units. However, sales were down 18.7% from one year ago, reflecting the ongoing impact of the pandemic on the housing market. The median price in the Midwest was $261,200, up 5.0% from February 2022, indicating that prices are continuing to rise in the region. Despite the decrease in year-over-year sales, the Midwest housing market is showing signs of recovery.

Real Estate Housing Market in the South

Existing-home sales in the South saw a significant rebound in February, with sales increasing by 15.9% from January to a seasonally adjusted annual rate of 2.11 million units. However, year-over-year sales were down by 21.3%, indicating the ongoing impact of the pandemic on the housing market. The median price in the South was $342,000, up 2.7% from one year ago, indicating that prices are continuing to rise in the region. The Southern housing market is showing resilience, with strong sales and rising prices.

Real Estate Housing Market in the West

In the West, existing-home sales skyrocketed by 19.4% in February, with a seasonally adjusted annual rate of 860,000 units. However, year-over-year sales were down by 28.3%, reflecting the ongoing impact of the pandemic on the housing market. The median price in the West was $541,100, down 5.6% from February 2022, indicating a decline in prices. Despite the decline in prices, the Western housing market is showing signs of recovery, with a surge in sales and increasing demand for homes.

Real Estate Housing Market Trends
Source: N.A.R.

Summary

The real estate housing market has rebounded from the previous 12-month slide, with all regions of the country experiencing a month-over-month increase in sales. The inventory of unsold homes has increased slightly, but remains at historic lows, leading to multiple offers on many properties. While the median existing-home price declined slightly from the previous year, it increased in the Midwest and South while declining in the Northeast and West.

Properties are also staying on the market slightly longer than they did a year ago, but the majority of homes are still selling within a month of being listed. First-time buyers and all-cash sales both decreased slightly from the previous month, but distressed sales remain low. Single-family home sales saw an increase from the previous month, but still declined compared to the previous year, while condo and co-op sales also increased from the previous month but experienced a significant decline compared to the previous year.

The Northeast and Midwest regions saw sales improve from the previous month, but all regions experienced a decline in sales compared to the previous year. Overall, the report suggests that while the housing market has rebounded from the previous year's slide, it is still experiencing challenges in terms of inventory and affordability.

New Home Sales Increase by 1.1 Percent

new home sales trends
Source: The U.S. Census Bureau

According to the latest New Home Sales Report by the Commerce Department, sales of new single-family homes in the US rose by 1.1% to a seasonally adjusted annual rate of 640,000 units in February, the highest level in six months. This is a positive indication that the housing market could be close to finding a floor after being hit hard by higher mortgage rates. Sales in the South and West regions increased, while they fell in the Midwest and dropped by 40.0% in the Northeast. Compared to the previous year, sales were down 19.0% in February.

The report also highlights that the housing market has borne the brunt of the Federal Reserve's aggressive interest rate hikes to curb high inflation. However, recent data suggests that the market may be close to bottoming out. Mortgage rates are falling again, in line with a sharp decline in US Treasury yields following the recent collapse of two US regional banks that sparked fears of contagion in the banking sector.

Despite these positive signs, the report cautions that the housing market is not out of the woods yet. Banks have tightened lending standards, which could make it harder for prospective homebuyers to borrow. The median new house price in February was $438,200, a 2.5% rise from a year ago, and there were 436,000 new homes on the market at the end of last month, down from 439,000 in January. At February's sales pace, it would take 8.2 months to clear the supply of houses on the market, down from 8.3 months in January.

Benefits for Potential Homebuyers

There are a few potential benefits for homebuyers in the current real estate housing market:

  • More choices: While the supply of homes on the market is still relatively low, it has increased slightly in recent months. This means that potential homebuyers may have more options to choose from when looking for a home. The number of new homes available on the market also increased in February, which means that potential homebuyers have more options to choose from.
  • Slower price growth: Although home prices are still rising, the pace of growth has slowed down in some areas. This could make it easier for homebuyers to afford a home in certain markets.
  • Easier negotiations: In a slower housing market, sellers may be more willing to negotiate on the price of their home or other terms of the sale. This could give homebuyers more bargaining power and help them get a better deal on a home.
  • Lower prices: While the median price of a new home rose slightly from a year ago, the increased inventory could lead to greater competition among sellers, potentially driving down prices.
  • Leading indicator: New home sales are considered a leading indicator for the housing market, meaning that an increase in new home sales could signal a positive trend for the housing market overall. This could be good news for potential homebuyers who may be hesitant to enter the market during a downturn.

In conclusion, the February report suggests some positive signs for the US housing market. Existing-home sales rebounded in the South and West, and new home sales rose to a six-month high, indicating a possible recovery from the recent slump caused by the Federal Reserve's aggressive interest rate hikes.

However, the market is not out of the woods yet, with tight lending standards potentially limiting access to credit for homebuyers. The median home prices varied across regions, with some areas experiencing modest growth and others seeing a decline. Overall, the report provides a cautiously optimistic outlook for the US housing market.

Even with rising mortgage rates and higher prices, the housing market cannot crash due to low supply and increasing demand as more millennials are projected to buy houses in the years to come. Now millennials make up the largest share of homebuyers in the US, according to a 2020 survey from the NAR. According to a new study by Realtor.com, buying is more cost-efficient than renting in a growing number of the largest cities in the country.

This is encouraging news for the millions of millennials who are approaching the peak homebuying age. Millennials are the largest generation in history, and they are already in their mid-thirties, approaching their prime home-buying years. They were delayed in purchasing a home, but are now back in full force. Thus, we have two, four, or five years of millennial homeownership.

Sources:

  • https://www.realtor.com/research/
  • https://www.zillow.com/home-values/
  • https://www.bankrate.com/mortgages/todays-rates/
  • https://www.nar.realtor/research-and-statistics/housing-statistics/
  • https://www.nar.realtor/research-and-statistics/housing-statistics/housing-affordability-index

Housing Market Predictions 2023: Will Home Prices Drop in 2023?

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Housing Market Predictions 2023

Housing Market Predictions 2023

In this blog post, we'll be discussing what experts are forecasting for the United States housing market in 2023. Will house prices go down in 2023? There is no one-size-fits-all answer to this question, as the housing market in the United States will likely vary depending on location and other factors. However, some experts believe that the market will decline in 2023, while others believe that home prices will rise.

Most experts in the housing industry predict less buyer demand, lower prices, and higher borrowing rates. Rate increases, along with a shortage of availability, have pushed many purchasers to the sidelines. Home prices may fall slightly, but not drastically as they did in 2008. Some believe that the housing market will continue to outperform compared to the pre-pandemic.

The housing market is always in flux, and predictions for the future can be challenging to make. However, experts are making some educated guesses about what we can expect in the coming years. Here's a look at some housing market predictions for 2023. According to a Forbes Advisor article, home prices are expected to continue to come down slowly, making it difficult for many homebuyers to access affordable housing.

However, the article notes that there may be some relief for buyers in the form of more inventory becoming available on the market. This may help to level out the playing field, making it easier for more people to find a home that they can afford. Another prediction from US News & World Report is that the housing market will experience a relatively shallow recession that stops and starts in 2023.

This prediction assumes that inflation will be under control by 2024, allowing mortgage rates to remain stable. In this scenario, home prices are expected to rise, but at a slower pace than they have been in recent years. Zillow also has some predictions for the housing market in 2023. One of the most positive is that housing affordability is expected to improve slightly. While high monthly mortgage costs and low inventory will continue to be a challenge, there are signs that conditions may stabilize.

This could be good news for first-time homebuyers, who have been struggling to find affordable homes in recent years. Another Zillow prediction is that home prices will continue to rise, but at a slower pace. This could be due to a number of factors, including higher interest rates, more inventory becoming available on the market, and a slowdown in the rate of job growth. While this may make it more difficult for some buyers to afford a home, it could also make it easier for others to find a property that fits their budget.

Finally, some experts predict that the housing market will continue to be shaped by changing demographics. For example, as baby boomers continue to retire, they may be more likely to downsize their homes, creating more opportunities for younger buyers to enter the market. Additionally, millennials are expected to continue to be a driving force in the housing market, with many of them reaching their peak homebuying years in the coming years.

Of course, these predictions are just that – predictions. The housing market can be unpredictable, and unforeseen factors can always come into play. However, these educated guesses can give us a general idea of what we can expect in the coming years. If you're planning to buy or sell a home in 2023, it may be helpful to keep these predictions in mind as you make your plans.

In its most recent prediction, Fannie Mae reiterated its opinion that the housing market is expected to remain subdued in 2023, with home sales staying slow but seeing a slight increase compared to previous estimates. Total home sales are expected to be 4.67 million units in 2023, up from a previous forecast of 4.52 million, but still the slowest annual pace of sales since 2011.

The ESR Group's report suggests recent mortgage application data came in stronger than expected, leading to an upward revision of the home sales outlook in the near term. However, interest rates have trended upward since the forecast was made. The report also forecasts a partial rebound in 2024 with total sales rising 9.6 percent to 5.12 million units.

The outlook for single-family mortgage originations is expected to be $1.69 trillion in 2023, a substantial contraction from the estimated 2022 volume of $2.36 trillion. The forecast for 2024 is $2.03 trillion. Affordability challenges are expected to remain elevated, and homebuilding is not expected to be enough to satisfy demand.

ALSO READ: Lastest National Housing Market Trends

Home values slipped 0.1% in January, leaving the typical home value at $329,542, or 4.1% below the peak value set in July 2022, according to the Zillow Home Value Index. Home values are 6.2% higher than one year earlier–a rapidly decelerating pace of annual growth, down from the nearly record-high 18.8% year-over-year growth measured in April. Zillow projects typical U.S. home values to rise 0.5% from January 2023 to January 2024 (seasonally adjusted).

Top 5 Metros Where House Prices Will Drop Most by January 2024

Some regional markets are projected to see home price declines. In their latest forecast released in February 2023, they now predict that home values will fall in 326 of the nation's 895 regional housing markets between January 2023 and January 2024. Lake Charles, LA tops the list with the highest anticipated decline of 7.2%.

Metro Area Change in Values
Lake Charles, LA -7.2%
Dickinson, ND -6.0%
Hobbs, NM -5.9%
Houma, LA -5.0%
DeRidder, LA -4.9%

Top 5 Metros Where House Prices Will Increase Most by January 2024 

Zillow still predicts that the vast majority of regional housing markets will see home values appreciating in 2023. Among the 897 regional housing markets that Zillow economists analyzed, 560 markets are predicted to see rising house prices over the next twelve months ending with Jan 2024. Another 9 markets are predicted to remain flat. The housing market in Kentucky (Murray) is forecasted to see the highest year-over-year house price growth of 11%.

Metro Area Change in Values
Murray, KY +11%
Cadillac, MI +10.8%
Shelby, NC +10.6%
Atchison, KS +10.3%
Summerville, GA +10.2%

Here is a Summary of Experts' Forecasts for the Housing Market in 2023

Selma Hepp, interim lead of the Office of The Chief Economist at CoreLogic: Real estate activity and consumer mood regarding the housing market plummeted after the recent increase in mortgage rates above 7%. In October, home price increases remained close to single digits, and this trend is expected to persist through the rest of the year and into 2023.

Some housing areas have experienced major recalibration since the spring price high and are projected to incur losses in 2023. Nonetheless, more deteriorating inventory, some relief in mortgage rate rises, and reasonably optimistic economic data may help eventually stabilize home values.

The top economist at Realtor.com, Danielle Hale: In 2023, the housing market could feel more like a buyer's market than a seller's market after being in a sellers' market for several years. While the 22.8% increase in listings should be good news for buyers, it's mostly due to homes taking longer to sell due to tighter affordability. In 2023, the national annual median price for homes for sale is projected to rise by another 5.4%, which is less than half the pace seen in 2022.

Even if a homeowner decides to sell their home, they will likely have a lot of equity in it. However, as buyers and sellers pull back from a housing market and economy in transition, we anticipate house sales to be significantly lower, down 14.1% compared to 2022. The rate of home sales in late 2022 is a good indicator of what the annual total for 2023 would look like.

Chief economist and senior vice president of research at the National Association of Realtors, Lawrence Yun: In 2023 and beyond, the real estate market in Atlanta will be the one to watch as 4.78 million existing homes are sold at stable prices. The median home price will rise to $385,800, an increase of only 0.3% from this year's level ($384,500), while home sales will fall 6.8% compared to 2022's level (5.13 million).

There's a chance that half of the country may witness price increases, while the other half will see price drops. Nonetheless, the markets in California may be an outlier, with San Francisco perhaps seeing price decreases of 10-15%. Following a 7% increase in 2022, rents will go up by 5% in 2023. In 2023, the foreclosure rate will be lower than ever before, accounting for less than one percent of all mortgages.

This is less than half the average historical rate of 2.5%, therefore the 1.3% GDP growth will be a significant slowdown. As the Fed lowers the pace of rate hikes in an effort to contain inflation, the 30-year fixed mortgage rate will fall to 5.7% in late 2022 from its peak of over 7% at the time. This is significantly lower than the pre-pandemic average of 8%.

Taylor Marr, Associate Chief Economist at Redfin: Mortgage rates are expected to fall further in the new year as a result of taming inflation and expectations that the Federal Reserve would ease rate hikes in the next year, which will boost demand for house purchases. But demand is still well below its high, so it's too early to declare a comeback or even a recovery.

We are keeping an eye on the job market for signs of sustained deceleration in price growth. Higher salaries and consequent price increases are one effect of a robust labor market like the one we're experiencing right now. A small increase in unemployment and/or slower economic growth would definitely help bring down mortgage rates even further, which seems paradoxical. If this trend continues into 2023, the boost in demand seen thus far may be reflected in a rise in pending sales.

Senior economist at Zillow, Jeff Tucker: The softening of the rental market has not yet resulted in any significant respite for tenants. There is hope, though, that prices will decrease in the coming months. Rent increases have slowed from a record 17.2% in February to 8.4% in November. Data like this is encouraging for renters hoping to sign a new lease in 2023, but they should still keep a careful eye on the market and move swiftly if they locate a rental that meets their needs and budget.

Since rental rates are still higher than they were before the outbreak, compromise and adaptability will be required well into next year. Tenants with leases coming up for renewal should realize that they have greater leverage to negotiate this year and should look around at comparable rentals in the area before making a decision.

Which forecast mentioned above do you think is more accurate?

Will Home Prices Drop in 2023: What Do Market Trends Predict?

What's happening in the housing market right now? The US housing market is in the midst of some significant changes, as average mortgage rates have increased by 80 basis points in just the past two weeks, rising from 5.99 to 6.80 for an average 30-year fixed-rate mortgage. At the same time, housing inventory has increased by 78% in the past 12 months alone. In this blog post, we'll explore what's happening in the US housing market right now, including home prices, housing inventory, and price reductions, and provide some predictions for the future of the housing market.

Asking Prices are Increasing Nationwide

According to Realtor.com's weekly inventory report, asking prices increased by 7.9% compared to one year ago, and we have been seeing single-digit increases in asking prices every week for the past 10 weeks in a row. This trend is quite different compared to 2022 when we saw single-digit gains for only the last four weeks of the year. The gain of 7.9% is also half of what we saw back in the fall months of 2022 when we saw a 16% increase in asking prices.

Housing Inventory is Increasing

Housing inventory has increased by 70.1% compared to the same week in 2022, which is a significant increase. Although the gains reported by realtor.com are slightly lower than those reported by altosresearch.com, they tend to be in line with each other for inventory numbers. Despite seeing fewer new listings for the past 32 weeks, housing supply has been increasing, or at least on an upward trajectory, since mid-May of last year.

New Listings are Decreasing

New listings have been decreasing for the past 32 consecutive weeks compared to the same timeframe in 2022. However, housing supply has been increasing or at least on an upward trajectory due to a pullback in home buying demand rather than a surge in new listings. For the past two weeks, there have been double-digit decreases in new listings across the US, which puts downward pressure on inventory levels.

Predictions for the Future

Based on the current trends, we can expect home prices to continue to rise, albeit at a slower rate than in previous years. Housing inventory is likely to increase further as fewer people are buying homes, and there are more homes available for sale. Price reductions could be on the horizon as more inventory becomes available, and buyers have more options to choose from.

It shows that the US housing market is undergoing some significant changes, with rising mortgage rates and increasing housing inventory. Despite this, asking prices are still on the rise, and housing supply is on an upward trajectory, at least for the time being. It will be interesting to see how the market continues to evolve in the coming months, and we'll keep an eye on the trends to provide updates as they happen.

The CoreLogic Home Price Insights report

Inflation and interest rates have impacted the housing market in the past year. Last year, mortgage rates hit record lows while housing values skyrocketed. CoreLogic HPI™ is designed to provide an early indication of home price trends. The CoreLogic Home Price Insights report features an interactive view of its Home Price Index product with analysis through November 2022 with forecasts through November 2023.

United States home prices nationwide, including distressed sales, increased year over year by 8.6% in November 2022 compared with November 2021. On a month-over-month basis, home prices declined by 0.2% in November 2022 compared with October 2022. The CoreLogic HPI Forecast indicates that home prices will decrease on a month-over-month basis by 0.1% from November to December 2022 and on a year-over-year basis by 2.8% from November 2022 to November 2023.

In November, year-over-year home price rise dropped to 8.6%, the lowest pace in two years, ending a 21-month run of double-digit growth. Many of the nation's most attractive home markets are slowing appreciation, even as 16 states defied the national trend and had double-digit price increases. The Southeastern states had the highest price increases but also the greatest cooling.

After the spring peak, Western regions have likewise seen considerable price drops. November housing values were 2.5% below the spring 2022 peak nationwide. CoreLogic anticipates price growth to begin declining year-over-year in the second quarter of 2023, lowering house values even further.

No states posted an annual decline in home prices. The states with the highest increases year over year were Florida (18%), South Carolina (13.9%), and Georgia (13.6%). These large cities continued to experience price increases in November, with Miami again on top at 21.3% year followed by Houston at 10.6%, Phoenix at 8.1%, and Las Vegas also at 7.7% year over year.

Here's when home prices can drop. While this may appear to be oversimplified, it is how markets work. Prices drop when demand is met. There is now an excessive demand for houses in several property markets, and there simply aren't enough homes to sell to prospective purchasers. Home construction has increased in recent years, although they are still far behind. Thus, big drops in housing prices would necessitate considerable drops in buyer demand.

Demand falls mostly as a result of higher interest rates or a general weakening of the economy. Rising interest rates would ultimately need far less demand and far more housing supply than we now have. Even if price growth slows this year, a drastic fall in home prices is quite unlikely. As a result, there will be no fall in house values; rather, a pullback, which is natural for any asset class. According to many experts, in the United States, house price growth is forecasted to “moderate” or maybe slightly drop in 2023.

Top Markets at Risk of Home Price Decline in 2023

The CoreLogic Market Risk Indicator (MRI), a monthly update of the overall health of housing markets across the country, predicts that Bellingham, WA is at very high risk (70%-plus probability) of a decline in home prices over the next 12 months. Crestview-Fort Walton Beach-Destin, FL; Salem, OR; Merced, CA and Urban Honolulu, HI are also at very high risk for price declines.

CoreLogic Market Risk Indicators is a multi-phase regression model that provides a probability score (from 1 to 100) on the likelihood of two scenarios per metro: a >10% price reduction and a ≤ 10% price reduction. The higher the score, the higher the risk of a price reduction. CoreLogic is a leading global property information, analytics, and data-enabled solutions provider.

Top Markets at Risk of Home Price Decline in 2023
Source: CoreLogic

The housing market may need “a correction” in order to make homes more affordable. Nationally, the U.S. housing market has experienced positive annual appreciation each quarter since the start of 2012. Between the second quarters of 2021 and 2022, all 50 states and the District of Columbia saw an increase in housing prices. In today's housing market of high mortgage rates, buyers are still driving up property prices, leading homes to sell rapidly. During this pandemic, we saw hyperactive buyers make offers without seeing the property and forego contingencies to win bidding wars in the highly competitive housing market.

The historically low mortgage rates fueled an increase in demand, particularly among millennials. However, they are running into a shortage of available housing and now have to face higher rates of close to 6%. Many buyers are still in hope of finding a home that fits their budget and needs. Despite popular belief that now is not a good time to buy, many home buyers are looking to lock in their monthly housing payments.

Although the housing market is still expected to favor sellers we appear to be at a tipping point in the housing market, where prices have risen so dramatically that buyers are backing off and home sales are slowing down considerably as compared to last year. According to U.S. House Price Index – October 2022 released by Federal Housing Finance Agency, house prices fell nationwide in August, down 0.7 percent from the previous month, according to the latest

House prices rose 11.9 percent from August 2021 to August 2022. The previously reported 0.6 percent price decline in July 2022 remained unchanged, For the nine census divisions, seasonally adjusted monthly house price changes from July to August 2022 ranged from -2.0 percent in the Mountain division to +0.4 percent in the New England division. The 12-month changes were all positive, ranging from +7.4 percent in the Pacific division to +16.2 percent in the South Atlantic division.

Will Home Prices Drop?
Source: FHFA House Price Index Monthly – October 2022

Home Prices Rose 12.4% in the Third Quarter of 2022

U.S. house prices rose 12.4 percent from the third quarter of 2021 to the third quarter of 2022 according to the Federal Housing Finance Agency House Price Index (FHFA HPI®). House prices were up 0.1 percent compared to the second quarter of 2022. FHFA’s seasonally adjusted monthly index for September was up 0.1 percent from August.

“House prices were flat for the third quarter but continued to remain above levels from a year ago,” said William Doerner, Ph.D., Supervisory Economist in FHFA’s Division of Research and Statistics. “The rate of U.S. house price growth has substantially decelerated. This deceleration is widespread with about one-third of all states and metropolitan statistical areas registering annual growth below 10 percent.”

Key Housing Prices Trends

  • Nationally, the U.S. housing market has experienced positive annual appreciation each quarter since the start of 2012.
  • House prices rose in all 50 states and the District of Columbia between the third quarters of 2021 and 2022.
  • House prices rose in all but two of the top 100 largest metropolitan areas over the last four quarters.
  • Annual price increase was greatest in North Port-Sarasota-Bradenton, FL, where the price increased by 29.2 percent.
  • Two metropolitan areas that experienced price declines are San Francisco-San Mateo-Redwood City, CA, and Oakland-Berkeley-Livermore, CA, where prices decreased by 4.3 percent and 0.6 percent, respectively.
  • Of the nine census divisions, the South Atlantic division recorded the strongest four-quarter appreciation, posting a 17.0 percent gain between the third quarters of 2021 and 2022.
  • Annual house price appreciation was weakest in the Pacific division, where prices rose by 8.3 percent between the third quarters of 2021 and 2022.

Home Prices Increasing the Fastest in these States?

  1. Florida 22.7 percent
  2. South Carolina 18.4 percent
  3. Tennessee 17.9 percent
  4. North Carolina 17.4 percent
  5. Georgia 16.7 percent

Where Are Home Prices Increasing the Slowest?

  1. District of Columbia 1.8 percent
  2. Oregon 7.6 percent
  3. California 7.6 percent
  4. Minnesota 7.7 percent
  5. Louisiana 8.3 percent
house price trends
Source: FHFA House Price Index Report – 2022 Q3

“Experts Predict the 2023 Housing Market: What to Expect?”

Real estate brokerage Redfin predicts that housing sales will sink to their lowest level since 2011. The main highlights of Redfin's predictions for the housing market in 2023.

  1. Home sales will fall to their lowest level since 2011, with a slow recovery in the second half of the year.
  2. Mortgage rates will decline, ending the year below 6%.
  3. Home prices will post their first year-over-year decline in a decade, but the U.S. will avoid a wave of foreclosures.
  4. Midwest and Northeast will hold up best as the overall market cools.
  5. Rents will fall, and many Gen Zers and young millennials will continue renting indefinitely.
  6. Builders will focus on multifamily rentals.
  7. Investor activity will bottom out in the spring, then rebound.
  8. Gen Zers will seek jobs and apartments in relatively affordable mid-tier cities.
  9. Migration from one part of the country to another will ease from the pandemic boom.
  10. Rising disaster insurance costs will make extremely climate-risky homes even more expensive.
  11. More cities will follow Minneapolis’ YIMBY example to curb housing expenses.
  12. Buyers’ agent commissions will rise slightly as fewer agents broker fewer deals at lower prices.

According to Realtor.com, 2023 could be a “nobody's-market” for buyers and sellers. Consumers who are ready for the challenge will need up-to-date information on market conditions, creativity and flexibility to adjust, and a healthy dose of patience in order to create success. Buyers will have some things to look forward to in 2023. There will be more homes for sale, homes will likely take longer to sell, and buyers will not encounter the intense competition that has been usual in recent years.

However, affordability issues keep 2023 from being a huge buyer's market, particularly for first-time homebuyers who have already endured significant problems. Home sellers should be aware that fewer buyers are projected to be looking for a property in 2023, as rising home prices and mortgage rates drive some prospective purchasers to postpone their purchases. As a result, sellers should expect increased competition from other for-sale postings, lengthier transaction timescales, and more bargaining with buyers.

Here's the forecast for key housing indicators by Realtor.com:

  • Mortgage Rates: 7.4% (avg) and 7.1% (year-end)
  • Existing Home Median Price Appreciation (Y/Y): +5.4%
  • Existing Home Sales (Y/Y | Annual Total): -14.1% to 4.53 million
  • Existing Home For-Sale Inventory (Y/Y): +22.8%
  • Single-Family Home Housing Starts (Y/Y | Annual): -5.4% to 0.9 million
  • Homeownership Rate: 65.7%
  • Rent Growth: +6.3%

According to the latest report published by Fortune, in October Moody's Analytics once again lowered its national home price outlook. Peak-to-trough, Zandi expects U.S. home prices to fall 10%. If a recession does manifest, that housing market prediction shifts down to a 20% peak-to-trough decline. Through spring 2023, he expects mortgage rates to hover around 6.5%.

Back in May, Moody's Analytics chief economist Mark Zandi told Fortune that the Federal Reserve's inflation fight would see the U.S. housing market slip into a “housing correction.” At the time, he expected home prices to flatline nationally and fall between 5% to 10% in “significantly overvalued” markets. In October, the firm clearly lowered its outlook.

The housing forecast varies regionally, though. 322 regional housing markets were analyzed. Of those, the firm predicts that 49 housing markets to see home prices fall over 15%. The firm predicts a 24.1% drop in property prices in Morristown, Tenn., and a 23.3% drop in Muskegon, Mich. Housing markets such as New York and Chicago will see a decline of 6.3% and 4.2%, respectively, from peak to trough. They expect “significantly overvalued” housing markets like Boise, Flagstaff, Seattle, and San Francisco to see the sharpest declines in home prices.

Researchers at Goldman Sachs published a study on August 30 with the title “The Housing Downturn: Further to Fall.” The investment bank's most recent projections indicate that overall activity in the United States home market will be lower by the end of 2022. The company anticipates significant drops in new home sales (down 22% from last year), existing home sales (down 17% from last year), and housing GDP (down 8.9% from last year).  And you shouldn't anticipate any relief in the year 2023. Goldman Sachs forecasts additional drops in housing-related metrics such as new home sales (another 8% drop), existing home sales (another 14% loss), and housing GDP (another 9.2% drop) in 2023.

Will Housing Demand Exceed Supply, Increasing Prices in 2023?

The broader outlook from several housing analysts is that housing demand will continue to surge due to several factors. For e.g; the millennials have aged into their prime homebuying years, and they are now the fastest-growing segment of home buyers. In 2018, millennial homeownership was at a record low but the situation has changed markedly. They are no longer holding back when it comes to homeownership.

According to the National Association of REALTORS’ Home Buyers and Sellers Generational Trends Report, millennials make up the largest share of the homebuying population at 43 percent, the most of any generation – an increase from 37% last year. They are also the most likely generation to use the internet to find the home they ultimately purchase and most likely to use a real estate agent.

The NAR report found that the combined share of younger millennials (23 to 31 years old) and older millennial buyers (32 to 41 years old) rose to 43% in 2021, up from 37% the year prior. Nearly two-thirds of younger millennials, or 65%, located the property they ultimately purchased online, a proportion that steadily declines with older generations. Eighty-seven percent of homebuyers utilized a real estate agent. This percentage was highest among younger millennials (92%) and older millennials (88%).

The study also found that first-time home buying among younger generations is on the rise, with over 4 out of 5 younger millennial home buyers – 81% – purchasing for the first time. Just under half – 48% – of older millennial buyers were first-time buyers. There is a surge of millennial buyers who are maturing into the conventional first-time buyer age bracket. Boomers comprised the highest proportion of house sellers at 42 percent, however, the ratio of millennial sellers has increased from 22 percent to 26 percent over the last year.

Millennials are expected to continue to drive the market and the participation of first-time homebuyers and older millennials are widely forecast to be elevated. Hence, housing prices cannot drop drastically in 2023. Inflation, excessive housing demand, and inadequate supply continue to drive up prices. Recent revisions by economists at Realtor.com have increased their 2022 median sales price appreciation projection for existing properties to 6.6 percent from 2.9 percent.

Many people have been priced out of the housing market by rising rents and rising mortgage rates, which have risen from an average of just 3.2% at the beginning of the year to 5.81% by mid-June. Mortgage rates then topped 7 percent in the last week of October, the highest level in 20 years. This has resulted in a decrease in property sales since more individuals are unable to pay the present high costs. Theoretically, home prices should fall for the remainder of this year and into 2023.

For starters, rising borrowing prices make credit more unaffordable. Second, as the economy continues to deteriorate, mortgage lenders are expected to approve fewer applicants. Although the housing market appears to be headed in the wrong direction, there are some bright spots. Economic forecasters, despite the recent recession, continue to expect robust demand from purchasers (millennials) and high home price increases in the housing market.

With homebuyers active and supply still lacking, the current trend of home prices will not see a reversal. In the last quarter of half of 2022, we are seeing a gradual shift in the real estate market away from sellers to more balanced conditions, with a rise in the number of properties entering the market. Existing-home sales descended in September, the eighth month in a row of declines. The market is heading to cool off, but house prices will not necessarily fall like crazy.

“The housing sector continues to undergo an adjustment due to the continuous rise in interest rates, which eclipsed 6% for 30-year fixed mortgages in September and are now approaching 7%,” said NAR Chief Economist Lawrence Yun. “Expensive regions of the country are especially feeling the pinch and seeing larger declines in sales.”

“Despite weaker sales, multiple offers are still occurring with more than a quarter of homes selling above list price due to limited inventory,” Yun added. “The current lack of supply underscores the vast contrast with the previous major market downturn from 2008 to 2010 when inventory levels were four times higher than they are today.”

Despite a sluggish market and waning buyer enthusiasm, we anticipate that home demand will continue to outstrip available inventory. Increasing rental costs should add to this expected development. However, as the number of available homes increases, the demand for housing should decrease owing to affordability concerns. As a result, we are not on the verge of a housing market crash. The current rate of home price growth is unsustainable, and higher mortgage rates combined with increased inventory will result in slower home price growth but unlikely any big price decline.

Sources:

  • https://www.zillow.com/research/data/
  • https://www.fhfa.gov/AboutUs/reportsplans/Pages/FHFA-Reports.aspx
  • https://www.noradarealestate.com/blog/housing-market-predictions/
  • https://www.realtor.com/research/2023-national-housing-forecast/
  • https://www.forbes.com/advisor/mortgages/real-estate/housing-market-predictions/
  • https://www.zillow.com/research/home-value-sales-forecast-october-2022-31556/
  • https://www.zillow.com/resources/stay-informed/housing-market-predictions-2023/
  • https://www.corelogic.com/intelligence/u-s-home-price-insights-october-2022/
  • https://realestate.usnews.com/real-estate/housing-market-index/articles/housing-market-predictions-for-the-next-5-years
  • https://fortune.com/2022/08/15/falling-home-prices-to-hit-these-housing-markets-in-2023-and-2024/
  • https://fortune.com/2022/12/03/housing-market-moodys-updated-home-price-correction-forecast-housing-crash/
  • https://www.spglobal.com/spdji/en/indices/indicators/sp-corelogic-case-shiller-us-national-home-price-nsa-index/
  • https://www.nar.realtor/newsroom/nar-report-shows-share-of-millennial-home-buyers-continues-to-rise

Where Are Housing Prices Falling 2022?

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Fortune reached out Moody's Analytics to get access to its latest proprietary housing analysis. The financial intelligence business predicted home price changes in 414 markets between 2022 and 2024. Moody's Analytics expects that 210 of the nation's 414 major housing markets will see home prices falling in the next two years and 204 will see home prices rise. 183 of the 413 biggest U.S. home markets are “overvalued” by more than 25%. Boise, Idaho, is 71.7% overvalued, and Flagstaff, Arizona, is 60.6%.

Redfin revealed its “risk score” on Friday, which identifies the home markets that are most vulnerable to a “housing slump.” The greater a market's “risk score,” the more likely it is that house prices will fall year over year.  Redfin examined 98 regional housing markets and evaluated indicators such as home-price volatility, average debt-to-income ratio, and home-price growth. Among the 98 markets measured by Redfin, Riverside had the highest likelihood of seeing a “housing downturn.”

It was followed by Boise, Cape Coral, North Port, Las Vegas, Sacramento, Bakersfield, Phoenix, Tampa, and Tucson. Popular migration destinations where home prices soared during the pandemic, such as Boise, Phoenix, and Tampa, are most likely to see the effects of a housing downturn amplified and year-over-year home prices decline if the economy enters a recession, a scenario that some economists believe is likely as inflation persists and stock markets stumble.

<<<Also Read: Will the Housing Market Crash? >>>

Homeowners in those markets who are considering selling should market their properties as soon as possible to avoid price drops. Rust Belt cities like Cleveland and Buffalo, which are still inexpensive, are the most resilient to a housing market crash. The U.S. housing market slowed significantly in the spring due to rising mortgage rates. Redfin studied which metros are most vulnerable to home-price reductions if the country enters a recession and which are most immune to an economic slump.

Recession-proof northern metros, including Cleveland and Buffalo, NY, are relatively inexpensive. Prospective homebuyers in these places can proceed with confidence. Redfin's examination of 98 U.S. metros with relevant data utilizes home-price volatility, average debt-to-income ratio, and home-price growth. Each metro is given an overall risk score relative to the others. 100 indicates the highest possibility of a housing market slump, including home-price decreases, while 0 indicates the lowest.

“Recession fears are escalating, mostly because the Fed has signaled it will continue to raise interest rates to tame inflation and cool consumer demand. Higher interest rates led to surging mortgage rates, which have already cooled down the housing market,” said Redfin Senior Economist Sheharyar Bokhari. “If the U.S. does enter a recession, we’re unlikely to see a housing-market crash like in the Great Recession because the factors affecting the economy are different: Most homeowners have a fair amount of home equity and not much debt and unemployment is low.”

Housing Markets at Risk of Falling Home Prices

If the U.S. enters a recession, Riverside's home market will chill the most. It has the highest danger score of any major U.S. city, 84. It's more likely than other metros to see prices drop year over year during a recession or economic slowdown, according to housing and economic statistics. Riverside, which includes San Bernardino, Ontario, and Palm Springs, has variable house values and was a favorite location during the epidemic for both permanent movers and second-home buyers.

Riverside is followed by Boise (76.9), Cape Coral, FL (76.7), North Port, FL (75), and Las Vegas (74.2).

Sacramento, CA (73.1), Bakersfield, CA (72.2), Phoenix (72), Tampa, FL (70.7), and Tucson, AZ (70.1) round out the top 10.

Many of these housing markets, like Riverside, are popular migration destinations or have quickly growing property prices, both of which increase their likelihood of a housing slump. Boise, Cape Coral, North Port, Las Vegas, Sacramento, and Phoenix were among the 20 fastest-cooling areas in May when mortgage rates reached 5.5%. As the economy continues to decline, prices may fall in many of these metros. Six of the 10 areas most at risk of downturns are among the most popular destinations for Redfin.com users moving from one metro to another.

Maricopa County (Phoenix) and Riverside County gained more residents from other parts of the U.S. than anywhere else in 2021, according to the U.S. Census. The most vulnerable metros have likewise seen an outsized price rise. North Port has the nation's fastest-growing house values, up 30.5 percent year over year in May, followed by Tampa (28.1 percent) and Las Vegas (26.8 percent ). Overall, nine of the ten most vulnerable locations had faster-growing house values than the national median (the exception is Sacramento, however, home prices there rose more than 40% throughout the pandemic, reaching $610,000 in May 2022).

Several of those metros went from inexpensive to unaffordable during the epidemic, owing in part to the migration of individuals from other locations. Among them is Boise, where the typical home price increased from $330,000 to $550,000 between May 2020 and May 2022, and Phoenix, where it increased from $300,000 to $485,000.

“Boise’s market is already turning around, as a lot of the people who moved to Idaho during the pandemic are either moving back to their hometowns or cashing in and moving to more affordable places. The housing market was hot during the pandemic, largely because of out-of-town buyers,” said Boise Redfin agent Shauna Pendleton.

Three at-risk metros are in California and three in Florida. San Jose, Oakland, and San Francisco experienced relatively moderate price increases throughout the epidemic, its people tend to have high salaries and considerable home equity, and their housing markets started falling fast in the first half of 2022, mainly owing to collapsing tech stocks. Not all homes in these metros will lose value. Large single-family houses in spread-out areas are recession-proof.

Housing Markets in Which Prices Are Unlikely to Fall

Relatively affordable Rust Belt metros are most resilient in the face of a recession. In case of a recession, Akron, Ohio has the lowest risk of experiencing a housing decline. It has the lowest total risk score of any major US city at 29.6. Low home-price volatility, a low debt-to-income ratio, a small number of second houses, and the fact that properties in Akron are unlikely to be flipped are some of the characteristics that make the city relatively stable.

With an overall risk score of 30.4, Akron is followed by Philadelphia, Montgomery County, PA (31.4), El Paso, TX (32.2), and Cleveland (32.4). The top ten include Cincinnati (32.6), Boston (32.6), Buffalo, NY (33.1), Kansas City, MO (33.4), and Rochester, NY (34.4). Almost all of those metros are inexpensive and have relatively slow-increasing prices, both of which would benefit their housing markets in the event of a recession.

Almost all of the most resilient metros are located in the northern United States, either in the Rust Belt or on the East Coast. Three of them are in Ohio, two in New York, and two in Pennsylvania. In nine of the ten most resilient metros, prices climbed at a slower rate than the national average (El Paso is the exception).

Seven of the 10 metros least in danger of a housing downturn had a median sale price below $300,000 in May, and nine of them were below the $431,000 national median. Affordability benefits property markets in a recession because more people can buy houses, and such locations may attract out-of-town buyers. Boston is pricey, although property prices climbed modestly throughout the epidemic. It's busy and lost residents as remote work became prevalent.

U.S. Metros Most and Least Susceptible to a Housing Downturn in the Next Recession

Ranked by highest to the lowest chance of a housing downturn. The ranking combines 10 indicators to come up with an overall risk score for each metro, relative to the other metros in this analysis. The highest possible score is 100 and the lowest possible score is 0. The indicators are as follows: home price volatility, average debt-to-income ratio, average home-loan-to-value ratio, labor market shock, percent of homes flipped, how much the housing market is “cooling” compared with other metros, the year-over-year change in domestic migration, the share of homes in the metro that are second homes, year-over-year price growth and elasticity of supply. Each factor is weighted equally.

U.S. Metro Area

 Overall Score Average Home-Loan-to-Value Ratio, 2021 Percent of Homes Flipped in 2021 Rank: How Quickly Housing Market Cooled in First Half of 2022 Net Domestic Migration in 2021, YoY Share of Second Homes, 2021 Price Growth in 2021, YoY
Riverside, CA 84 83% 4.50% 15 19,204 7.70% 21.00%
Boise, ID 76.9 6 6,782 6.00% 30.90%
Cape Coral, FL 76.7 81% 2.90% 11 7,345 23.40% 23.60%
North Port, FL 75 79% 4.40% 18 8,283 20.20% 23.30%
Las Vegas, NV 74.2 84% 8.30% 12 -15,143 7.60% 18.60%
Sacramento, CA 73.1 81% 5.40% 2 4,157 4.30% 19.30%
Bakersfield, CA 72.2 87% 3.80% 21 6,111 2.50% 17.30%
Phoenix, AZ 72 82% 10.30% 17 -15,530 7.20% 25.40%
Tampa, FL 70.7 85% 7.40% 22 524 8.10% 19.60%
Tucson, AZ 70.1 84% 7.70% 54 -2,677 7.10% 21.50%
San Diego, CA 69.8 81% 5.30% 8 -8,189 3.70% 17.50%
Jacksonville, FL 69.3 85% 7.20% 36 4,136 6.20% 16.60%
Stockton, CA 68.2 84% 4.70% 5 3,578 1.00% 19.30%
Knoxville, TN 67 86% 4.60% 13 4,527 5.20% 18.30%
Orlando, FL 63.8 85% 6.40% 31 -6,536 8.70% 16.70%
Charleston, SC 63.4 85% 3.80% 67 -2,921 7.60% 15.40%
West Palm Beach, FL 63.3 80% 3.10% 30 972 12.00% 17.40%
Fresno, CA 60.6 85% 4.70% 37 2,719 2.90% 17.90%
Raleigh, NC 60.4 83% 8.90% 42 3,430 2.60% 17.50%
Oxnard, CA 59.8 79% 2.50% 28 323 3.30% 16.70%
Salt Lake City, UT 57.7 -3,020 2.00% 22.80%
Columbia, SC 56.9 90% 4.40% 2,296 3.20%
Providence, RI 56.6 85% 2.70% 44 3,664 3.90% 15.40%
Atlanta, GA 56.4 86% 9.90% 47 -4,229 2.20% 19.20%
Miami, FL 56.3 82% 2.90% 53 -5,120 5.90% 18.60%
Charlotte, NC 56.1 85% 10.10% -6,444 2.70% 16.50%
Virginia Beach, VA 55.8 92% 3.20% 80 864 3.40% 8.30%
Tacoma, WA 55.5 9 -3,571 1.70% 19.80%
Detroit, MI 54.8 87% 5.20% 70 -2,062 1.00% 15.40%
Los Angeles, CA 54.8 79% 4.10% 46 -69,329 1.90% 17.30%
Austin, TX 54.6 16 -8,609 3.90% 31.60%
Portland, OR 54.3 82% 3.70% 14 -17,716 2.30% 15.40%
Anaheim, CA 53.9 76% 4.50% 20 -6,644 3.80% 16.00%
Denver, CO 53.8 82% 6.90% 7 -18,063 2.40% 16.70%
Colorado Springs, CO 53.7 87% 5.00% 693 2.50%
Baton Rouge, LA 52.4 89% 3.00% 2,287 2.40% 9.80%
Greenville, SC 52.1 85% 3.50% 32 1,771 4.70% 14.00%
Winston-Salem, NC 51.9 87% 5.10% 2.70% 13.70%
Grand Rapids, MI 51.7 86% 3.60% 29 1,028 2.40% 15.20%
Greensboro, NC 51.7 87% 6.70% 38 -181 2.10% 11.80%
Warren, MI 50.5 86% 2.90% 35 6,180 1.60% 11.40%
Tulsa, OK 50.1 88% 3.40% 45 2,325 2.10% 12.50%
Fort Lauderdale, FL 49.9 82% 3.00% 72 -5,121 7.50% 13.30%
Fort Worth, TX 49.6 50 1,978 1.70% 18.30%
Nashville, TN 49.3 84% 8.30% 48 -6,093 3.40% 17.00%
Allentown, PA 48.6 87% 2.20% 62 3,722 3.40% 14.20%
Camden, NJ 47.9 88% 3.00% 75 4,300 0.50% 17.90%
Houston, TX 47.7 24 -334 2.90% 15.50%
Seattle, WA 47.6 79% 1.90% 4 -37,365 1.80% 17.20%
Nassau County, NY 47.4 80% 3.60% 58 12,296 4.70% 15.20%
Albuquerque, NM 46.8 -1,714 2.80%
New Orleans, LA 46.6 88% 2.90% 23 -3,930 3.40% 10.70%
San Antonio, TX 46.6 40 -138 2.90% 15.10%
San Jose, CA 46.4 74% 2.50% 1 -22,661 0.80% 13.60%
San Francisco, CA 46.3 72% 1.90% 10 -55,918 2.40% 4.80%
Oakland, CA 45.8 78% 2.60% 3 -23,280 1.00% 16.30%
Dallas, TX 45.4 40 -5,685 1.70% 17.90%
Richmond, VA 45.4 87% 3.70% 59 1,995 1.40% 12.30%
Oklahoma City, OK 45.3 88% 5.10% 52 476 1.70% 10.60%
Washington, D.C. 44.2 87% 2.50% 28 -35,800 1.50% 10.10%
New Haven, CT 44.1 87% 2.00% 82 4,492 1.90% 15.80%
Birmingham, AL 43.4 88% 5.90% 68 95 1.40% 8.40%
Little Rock, AR 43.1 89% 4.90% 43 472 1.80% 10.70%
Frederick, MD 42.9 84% 2.00% 25 -58 0.90% 11.70%
Memphis, TN 42.7 87% 7.50% 33 -535 1.20% 13.30%
Honolulu, HI 42.6 79% 0.50% 19 6.20% 7.80%
St. Louis, MO 42.2 86% 3.40% -2,214 1.30% 10.10%
Baltimore, MD 41.9 86% 2.60% 74 6,085 1.40% 8.50%
Bridgeport, CT 41.7 81% 1.10% 88 8,871 2.00% 11.60%
Worcester, MA 40.8 86% 1.80% 57 3,354 1.20% 16.10%
Indianapolis, IN 39.9 41 902 1.40% 13.50%
Newark, NJ 39.3 84% 1.90% 73 7,348 2.80% 13.20%
Wichita, KS 39.3 -1,813 1.10% 12.50%
Lake County, IL 38.6 85% 1.80% 87 2,746 1.70% 14.40%
Louisville, KY 38.6 87% 4.80% 34 -378 1.20% 9.70%
Wilmington, DE 37.8 88% 2.80% 64 738 1.80% 11.30%
Hartford, CT 36.8 86% 1.70% 80 7,182 1.80% 12.00%
Minneapolis, MN 36.8 85% 3.70% 50 -10,673 1.30% 11.10%
Gary, IN 36.7 939 1.20% 9.70%
Pittsburgh, PA 36.4 87% 1.60% 76 -337 1.50% 12.70%
Elgin, IL 35.8 84% 1.10% 60 3,590 0.60% 11.50%
New York, NY 35.4 78% 1.70% 48 -2,01,570 2.80% 12.30%
Syracuse, NY 35.2 86% 2.20% 1,510 3.30% 11.00%
Milwaukee, WI 35.1 86% 3.30% 79 -2,993 1.40% 7.20%
Omaha, NE 35.1 87% 4.90% 56 -237 1.30% 9.70%
Albany, NY 34.5 87% 2.00% 90 3,521 2.80% 13.70%
Chicago, IL 34.4 86% 1.80% 70 -32,998 1.30% 11.70%
Columbus, OH 34.2 85% 3.40% 61 2,507 1.40% 13.50%
Rochester, NY 34 85% 2.00% 86 1,330 3.20% 12.60%
Kansas City, MO 33.4 -1,491 1.30% 10.90%
Buffalo, NY 33.1 86% 2.60% 78 1,877 1.40% 17.00%
Boston, MA 32.6 79% 1.20% 63 -23,964 2.80% 12.20%
Cincinnati, OH 32.6 87% 3.90% 84 -360 1.30% 13.90%
Cleveland, OH 32.4 86% 2.50% 71 225 1.20% 9.50%
El Paso, TX 32.2 89 -24 1.80% 13.90%
Montgomery County, PA 31.4 83% 1.80% 66 6,685 0.80% 11.00%
Philadelphia, PA 30.4 86% 2.00% 64 -15,721 1.40% 10.10%
Akron, OH 29.6 87% 2.70% 83 2,029 1.20% 7.90%

 

Source: https://www.redfin.com/news/metros-recession-risk-housing-downturn-2022/

Where's Housing Headed? Follow Rents

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It may not be the most widespread measure of housing prices, but if you want to follow a powerful driver, look at rents.

Specifically, it's the rents Americans pay on condos, apartments or houses that are about the same size, and share the same neighborhood as your ranch or colonial, that in the end determine what your house is worth.

"If you look at the trend in rents to see where housing prices are headed, you're looking at the right measure," says Yale economist Robert Shiller.

In recent reports, Deutsche Bank demonstrates how steady or even falling rents have pulled down housing prices, to the point where in many markets it costs about the same amount to own as to lease. That's a golden mean that America hasn't seen in almost a decade. The DB research also offers convincing evidence that the wrenching adjustment in housing prices is finished for much of the nation, with a bit more pain to come in selected areas.

Before we get to the numbers, let's examine why rents exercise a kind of gravitational pull over home prices.

[Read more…]

Further Home Price Declines Forecast Despite Recent Gains

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Contrary to popular opinion, home prices have not bottomed out, according to the financial information and analysis firm Fiserv.

The firm projects median home prices will drop 11.3 percent by June 30 of next year. It predicts declines in 342 of 381 markets over the next year. Only then will prices stabilize, and rise 3.6 percent in 2011, the firm predicts.

The S&P/Case-Shiller Home Price Index had seemed to indicate prices had already stabilized. The composite index of 20 cities rose in May, June, and July, and home prices gained 3.6 percent nationwide.

But it now looks like that may have been a blip due to the impact of the tax credit for first-time homebuyers, analysts said. By the end of November, when it expires, the credit will have been used by 1.8 million homebuyers, at least 355,000 of whom would not have bought a house without the tax break.

In Fiserv’s latest forecast, the markets that will have the steepest declines are those with the greatest number of foreclosures.  [Are these new opportunities for ]

[Read more…]

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Contact

Norada Real Estate Investments 30251 Golden Lantern, Suite E-261 Laguna Niguel, CA 92677

(949) 218-6668
(800) 611-3060
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