What will happen in the 2023 real estate market?
With 27 research firms with 27 different forecasts weighing in, the guess is probably somewhere in the middle of the predictions.
Realtor.com has the most optimistic outlook of the 27. Economists at Realtor.com think that the median price of existing homes will rise 5.4% this year, with mortgage rates averaging 7.4%.
CoreLogic, which is another company widely known for their market predictions, thinks we will see home prices rise 2.8% this year. (Note that CoreLogic’s prediction is November-November.)
NAR, which is short for the National Association of REALTORS(R), believes there will only be a slight increase of 1.2%, with interest rates averaging 6.3%.
Freddie Mac, which is a mortgage financing company, has home prices falling ever so slightly, a 0.2% drop. Freddie Mac believes interest rates will average 6.4%.
Zillow forecasts a drop of 1.1% from November 2022-November 2023.
Wells Fargo has a bleaker view of home prices dropping 5.5% in 2023.
Goldman Sachs, the investment banking firm, forecasts an average of 7.6% price decline from 2022.
Morgan Stanley indicates that in 2023, they expect to see a drop of 8% for home prices.
Those on the higher side? CoStar thinks a 20% decline in home prices, Yield Street says the same by the third quarter of 2023. The firm that foresees the highest decline? John Burns Real Estate Consulting is predicting a 20-22% decline in home prices from the peak of the market until it hits a low.
Here is the link to the 27 predictions on Yahoo Finance.
To me, what the above shows is that no one has a crystal ball. Top economists have widely varying views on what the 2023 real estate market will look like.
Many of the economists interviewed do clarify that they are looking at the overall market. There are areas where they foresee greater decline, but other areas where there may still be pent-up demand and little inventory, which would have those markets looking different than others.
What does this mean for the Towson real estate market?
I think it means that prices and demand will fluctuate depending on interest rates and supply of homes for sale.
Each week may be different, and we may see seasonal disruptions that we haven’t seen as much of since 2020.
Your Towson neighborhood may be different than a Timonium neighborhood just up the street. Real estate is very local. Call me to help you navigate this changing Timonium real estate market!