Our clients and prospective clients often ask us whether housing prices will increase, and whether or not there will be sufficient inventory coming on the market in the near future. Some common questions might include: "will next Spring be as crazy as last Spring?" "Are there any great houses coming on the market?". One catch phrase we rely on as realtors is "we don't have a crystal ball"* (to predict what will happen in the real estate market). We can know within our own small circle of colleagues at Maple and Main Realty, whether or not new inventory is coming on the market in the near future, and we can know about our own upcoming listings. We may have friends/colleagues at other offices who are willing to share information about upcoming listings. But, generally speaking, upcoming inventory is not a known quantity. We can (and do) stay on top of economic forecasts from reliable news sources. We have ongoing discussions within our office about what we see happening, and what we *think might happen*, based what we are seeing in our social and professional spheres. Here is a tidbit that might shed some light on what we can expect in 2023. This recent post from MassLive (via Realtor.com) suggests that while housing prices will continue to increase - it will happen at a much slower pace. We can expect more inventory on the market, and steady, if slightly lower, mortgage interest rates. Rent prices are expected to increase as well.
(*credit to Julie Held)
Are housing prices coming down in 2023? Popular real estate website says no
Published: Nov. 30, 2022, 8:40 a.m.
Heather Morrison | hmorrison@masslive.com
Housing prices aren’t coming down in 2023, Realtor.com predicts.
The real estate website released its 2023 housing market predictions Wednesday, stating that mortgage rates will be above 7%, rents will outpace home prices and overall home sales will decline.
In 2022, the average mortgage rate was 5.5%, with rates being about 7.5% at the end of the year. Realtor.com predicts these rates will stay around 7.4% for most of the year and possible come down to 7.1% by the end of 2023.
Home prices will also continue to increase, the website stated. But it will be at a slower rate than previous years. This means the typical mortgage payment, the website stated, will also be higher in 2023, with an average of $2,430, which is up 28%. This, Realtor.com wrote, will price “many buyers out of the market.”
“This would be a nearly 28% increase over the mortgage payment in 2022, and roughly double the typical payment for buyers in 2021,” the website states.
But the website also predicted there are some things for buyers to look forward to in 2023.
“There will be more homes for sale, homes will likely take longer to sell, and buyers will not face the extreme competition that was commonplace over the past few years, it read
In Boston, Realtor.com predicts that sales growth will be down but that prices will increase 9.5%. In Worcester, sales growth will increase by 2.5%, while prices will increase 10.6%. And in Springfield, sales growth will increase slightly, while prices will increase by 8.9% year over year.
“Compared to the wild ride of the past two years, 2023 will be a slower-paced housing market, which means drastic shifts like price declines may not happen as quickly as some have anticipated. It will be a challenging year for both buyers and sellers, but an important one in setting the stage for home sales to return to a sustainable pace over the next two to three years,” said Danielle Hale, chief economist for Realtor.com. “With mortgage rates continuing to climb as the Fed navigates the economy to a soft-ish landing, higher costs will lead to fewer closings, but that doesn’t mean homebuying will stop entirely in 2023. Americans who are determined to make a move will find that staying up-to-date on the market, flexibility, creativity and a healthy dose of patience will go a long way toward success in the year ahead.”But it’s not just about homeowners. Renters will still face issues in 2023, the website states.
“U.S. renters will continue to face challenges from limited supply and excess demand in the coming year that will keep upward pressure on rent growth,” according to the website. “At a national level, we forecast rent growth of 6.3% in the next 12 months, somewhat ahead of home price growth and historical rent trends.”
Overall, Realtor.com said, rents “are expected to set a new high in 2023.”
For the full report, click here.