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How Low Will They Go? The Home Price Prediction for 2023
It seems the entire real estate industry is focused on interest rates and home prices, and for good reason. With such an increase in rates over the last six months, many potential buyers and sellers are feeling reluctant to make a move. However, if home prices start to drop, this hesitation could change.
According to realtor.com, “…the median list price for a typical home peaked at $450,000 in June, and has since dropped in October to $425,000. And home prices will likely continue downward toward the holidays, although perhaps not as low as many homebuyers might like.”
It’s important to remember, even if home prices are dropping some each month, they are still higher than what they were last year.
There are perks to being a buyer right now
During the pandemic, houses were flying off the market as soon as they were listed. This meant your buyers needed to put in their best offers with no time to spare. Now that the housing market has cooled off, your buyers have more time to look for what they want and consider a fair offer.
Another area you should advise your clients on is how right now most homes that are selling will go for less than what they are listed for. Last year at this time most went for over their listing price. This gives your buyers wiggle room for payments with the higher interest rates. In some cases, the payment may only be a couple hundred dollars off from where they would have been last year.
Home Prices in 2023
So, what does all this change mean for home prices in the year ahead? According to Fannie Mae’s latest economic forecast, it believes that the housing market will tip the U.S. into a recession in early 2023. Another prediction is that home prices could fall next year.
According to Fox Business, “The mortgage giant’s (Fannie Mae’s) Economic and Strategic Research (ESR) Group revised its economic forecast for home prices, saying it expects them to rise just 9% annually in 2022 — down from its previous forecast of 16% annually. The group also forecasted that in 2023, home prices will fall by an average 1.5%, down from its previous forecast of 4.4% growth.”
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