When it comes to real estate and the housing market, everyone has an opinion. It doesn’t matter where — a family gathering, the grocery store, out to dinner — we’re always asked: “How’s the market?”
After sharing our opinion based on the most current information available, the questioners sometimes offer their opinions. This is where we’re told that the market is going to crash or interest rates are going sky high or need to drop further.
It can be confusing. Last year — after a very active 2021 that few predicted — the market underwent a major shift as economic uncertainty and higher mortgage rates reduced buyer demand, slowed the pace of home sales, and moderated home prices.
Nonetheless, median sales prices for single family homes on Cape Cod in 2022 increased 10.8% from $620,00.00 to $667,000.00. Median sales prices for condominiums went up $18.4% from $380,000.00 to $450,000.00 driven by the lack of inventory for single family homes.
So what’s going to happen in 2023?
An article from HousingWire offers this perspective:
“The red-hot housing market of the past 2 ½ years was characterized by sub-three percent mortgage rates, fast-paced bidding wars and record-low inventory. But more recently, market conditions have done an about-face. . . . now is the opportunity for everyone to become re-educated about what a ‘typical’ housing market looks like.”
This year, experts agree we may see the return of greater stability and predictability in the housing market if inflation continues to ease and mortgage rates stabilize. Here’s what they have to say.
The 2023 forecast from the National Association of Realtors (NAR) says:
“While 2022 may be remembered as a year of housing volatility, 2023 likely will become a year of long-lost normalcy returning to the market, . . . mortgage rates are expected to stabilize while home sales and prices moderate after recent highs, . . .”
Danielle Hale, Chief Economist at realtor.com, adds:
“. . . buyers will not face the extreme competition that was commonplace over the past few years.”
Lawrence Yun, Chief Economist at NAR, explains home prices will vary by local area, but will net neutral nationwide as the market continues to adjust:
“After a big boom over the past two years, there will essentially be no change nationally . . . Half of the country may experience small price gains, while the other half may see slight price declines.”
Mark Fleming, Chief Economist at First American, says:
“The housing market, once adjusted to the new normal of higher mortgage rates, will benefit from continued strong demographic-driven demand relative to an overall, long-run shortage of supply.
If you have specific questions about today’s housing market and whether this is the time you should make your move, please connect with us at 508-360-5664 or msennott@todayrealestate.com. We’ll provide you with the most current, fact based information that can help you make a decision that is in your best interest.
Talk soon…
Mari and Hank
