What Experts Are Saying About Home Prices
What are experts saying about the home prices right now and for 2023? We’ve all seen a change, a big shift in the market. Market has slowed down, inflation is high, interest rates are high, home prices are high. So there’s a big change in the housing market coming up in 2023: let us explore that.
There’s a lot of talk in town, locally and nationally about home price crashes, let alone home price drops. A lot of the buyers that we talk to always ask if the prices are going to go down 20% or 30%. They’re waiting for the price crash. And we say, according to the experts, there is no price crash, they’re not going to go down 30%, but the appreciation has slowed down and there is depreciation in the price. So definitely the prices are dropping nationally. But check your local markets with your local experts and local realtors. They will tell you the specifics of how much the prices have dropped or will drop in 2023.
But according to the experts, these are the same experts that predicted a home appreciation of up to 4% or 5% in 2023 have changed their predictions, obviously due to the rate increase and the high inflation and all that. So they are still predicting almost an appreciation, but more of a deceleration in housing prices. So let us explore that.
Also I wanted to read a quote to you from Redfin and here it is. “For those bearish folks eagerly awaiting the home price crash, you’ll have to keep waiting. As much as demand is pulling back, supply is as well reducing downward pressure on prices in the short run.” So as you can see, the prices are not going to crash. There are a lot of buyers out there, yet there is still a shortage.
And what I found out talking to a lot of people and local experts, because of the high interest rates, a lot of the sellers that want to sell their home are going to look at their interest rates and say, look, I bought this house 2, 3, 4, 5 years ago and I have 2.5% or 4% or 5%. Why would I sell now and get an 8% loan?
So, to add to the low inventory, this new phenomenon created by the high interest rate will keep the housing supply short and it will not increase as much as it should. So that will keep the house prices stable and not crash as a lot of people wanted to. But it will either appreciate gradually or hold on. As I mentioned to you earlier, there are more buyers than sellers, yet it is still a seller’s market. On average, homes used to sell nationwide within eight to fifteen days, about six, seven, eight months ago. Homes are still selling within 45 days right now in this market, with the higher prices and high interest rate. What that means is it’s still a seller’s market.
In a normal market, when it takes four or five months to sell a home, it becomes a buyer’s market. So we are not in a buyers market, even though there are more buyers right now than sellers. And buyers are still buying despite the high prices and high interest rates. So this calls for a new prediction from the home experts. So let’s look at what they are predicting as far as the 2023 prices.