5 Brand-New and Affordable Homes in the Nation’s Top Markets

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How about a brand-new home to go with the brand-new year? The good news is that 2023 is already full of great opportunities for buyers.

We zeroed in on the markets predicted to be red-hot in 2023 and found a surprising number of excellent homes with clean slates—they’re all shiny and new and have never been lived in.

And get this: These five primo properties we picked are all priced below $500,000.

They’re all located within 25 miles of the cities our experts say everyone will want to live in in 2023.

“They are very affordable markets. These are areas where your housing dollars really stretch further,” says Realtor.com® Chief Economist Danielle Hale. “These places did not overheat during the [COVID-19] pandemic housing frenzy over the last two years. That puts them on more solid footing. Prices and sales still have more room to grow.”

So if owning your own home is high on the agenda, take a look at these great finds.

28 Eddy Rd, Barkhamsted, CT

Price: $429,000
Connecticut cool: This two-bedroom, 2.5-bath home is within the Hartford metro area. On top of the modest price, it’s located in the region that ranked No. 1 on our list of the top 10 real estate markets in 2023.

So what’s the catch? Apparently, there isn’t one.

This 1,700-square-foot gem sits on a generous 0.7-acre lot that’s flat and wooded. There’s a primary bedroom with two walk-in closets, a second bedroom, and a home office.

The modern Colonial features vaulted ceilings and hardwood flooring throughout. There’s also a full, insulated basement.

The location is close to Hartford businesses, a ski resort, and hiking trails. Score!

Reasonably priced new home near Hartford, CT
Barkhamsted, CT

Realtor.com

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7425 Caveson Ct, El Paso, TX

Price: $499,950
Texas temptation: This sleek, modern design has the popular open floor plan. With four bedrooms and 2.5 baths in 2,059 square feet of living space, the home is primed and ready for its first owners.

Located in El Paso, the No. 2 market on our list, it has a gorgeous kitchen with a quartz-topped island, a pantry, and quality stainless-steel appliances. Its energy-efficient design aims to cut energy use by 40%.

Outside, the 8,420-square-foot lot offers plenty of room for pets, a garden, or a play area.

El Paso, TX

Realtor.com

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1916 Cedar St, Louisville, KY

Price: $220,000
Kentucky keen: Well, isn’t this three-bedroom, two-bath, brick ranch the cutest thing? It’s hard to believe you can get a house for that price in Louisville, No. 3 on our list.

Inside, you’ll find an open floor plan, including a kitchen with granite counters, stainless-steel appliances, and a peninsula for bar seating. There’s also luxury vinyl wood flooring throughout the 1,727-square-foot space.

Louisville, KY

Realtor.com

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139 Harvard St Unit 7, Fitchburg, MA

Price: $409,900
Massachusetts marvel: Think of how prestigious it would sound to live in Harvard Commons. That’s the name of this pet-friendly community of contemporary townhouse condos with two-car garages.

This unit features two bedrooms and two baths in an open floor plan. There’s a cathedral ceiling, luxury vinyl wood flooring throughout, and cozy carpeting in the bedroom.

The three-level unit is a 30-minute drive from Worcester, MA, No. 4 on our list. It’s also less than an hour’s drive from ultraexpensive Boston, making it doubly appealing.

Fitchburg, MA

Realtor.com

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46 Ketchum Pl, Buffalo, NY

Price: $469,900
New York nifty: Possibly the coolest of them all, this contemporary home in Buffalo’s Garden District features large windows, which provide all three levels with plenty of natural light.

There are three bedrooms and 2.5 baths in 2,007 square feet of living space. The two-story, primary suite has a cathedral ceiling and a private mezzanine with lovely views.

You can park your car here and walk to numerous cafes and shops. There’s also plenty of storage in this uniquely designed home, which is located in the No. 5 market on our list.

Buffalo, NY

Realtor.com

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Exclusive: Marie Kondo Reveals Her Vows for the New Year—and How Her Tidying Advice Has Changed

Marie Kondo shares organizing tips for the new year.

KonMari Media, Inc.

Every new year, countless vows are made to declutter—which explains the enduring popularity of Marie Kondo.

This tidying expert “sparked joy” around the world with the release of her bestselling book in 2010, “The Life-Changing Magic of Tidying Up.” Since then, she’s starred in her own Netflix series, “Sparking Joy With Marie Kondo,” recently released yet another tome, “Kurashi at Home,” and has even encouraged us to add to our pile of possessions by launching her own line of organizational products.

Yet in the 12 years since she first encouraged household purging, Kondo’s approach to organization has evolved, expanding beyond streamlining our closets and cabinets into a whole way of life. Curious to hear what’s changed, we asked Kondo about her own New Year’s resolutions, the biggest mistakes people still make when decluttering, and much more that will help you live your best life at home in 2023 and beyond.

Marie Kondo practices category-based decluttering.
Marie Kondo practices category-based decluttering.

KonMari Media, Inc.

Clearing out clutter is a common New Year’s resolution. What’s your best advice for achieving that goal?

My best advice for those looking to initiate a New Year’s organization project is to think clearly about what intentions you want to set. Ask yourself what your ideal life looks like, and envision what exactly you want to be surrounded by.

When you work through this step of the decluttering process, you are really clarifying why you want to tidy and envisioning your best life.

I feel the same goes for setting a resolution; be honest with yourself and what you want out of the new year.

Do you make New Year’s resolutions and if so, what are they? What are you looking forward to in 2023 that will spark joy in your own life?

Winter months are the ideal time to go inward and plan for the year ahead. Journaling is how I sort my thoughts and tidy my mind. I use the opportunity to identify what I am looking forward to reorganizing, whether it be related to my personal or professional life.

To me, a fresh notebook can go a long way when it comes to getting your life in order, especially around the new year. I often will refer to what I’ve written to check back with my original resolutions and track how I’ve progressed, or if the original intention has evolved since working toward it.

The new year is a time of rich tradition in Japan, with family and friends gathering for days to celebrate the occasion. From writing intentions to eating symbolic foods, this time of year is great for resolution setting.

In 2023, I am setting the resolution to use something new. Replacing something that you often use, like a toothbrush, towels, or socks, can infuse fresh energy into our life and make the new year one that truly sparks joy.

What are the most common mistakes you see clients make when decluttering in the new year?

In the KonMari Method, we tidy by category and not by location. When clients tidy a single closet or room at a time, they’re repeating the same work in many locations. That is why my method believes in category-based decluttering, so you can tackle all of one category or type of item at once—beginning with clothes, then books, moving over to papers, then komono [miscellaneous items], and finally sentimental items.

Tidying in this specific order is not only efficient, but you’ll also gain a deeper understanding of the method and of yourself as you move along.

Marie Kondo journals to set organizational intentions.
Kondo journals to set organizational intentions.

KonMari Media, Inc.

Gifts are an inevitable part of the holiday season. … What’s your strategy for giving presents that don’t contribute to clutter, and how do you deal with receiving items that don’t spark joy?

When giving gifts, I urge people to follow these three steps: Think about the recipient’s lifestyle, imagine them using the gift, and let go of the end results.

When you think intentionally about what your friend or family member may need in their life, the process becomes a little simpler. It doesn’t have to spark joy for you, but it obviously should for them!

Lastly, I urge people to give gifts without expectations or an agenda, which can help both the giver and the receiver from feeling undue pressure or like they’ve fallen short.

My recommendation for making the most of gifts you’ve received is to try it out at least once.

The ability to feel what truly excites you is only gained through experience. Be adventurous and welcome things that are different. After trying the gift out, if it still doesn’t feel like a fit, thank it for the joy it brought when you first received it and let go with gratitude. There are many ways to mindfully discard an unused gift.

Marie Kondo with her new book, “Kurashi at Home.”
Kondo with her new book, “Kurashi at Home”

KonMari Media, Inc.

How is your new book an evolution or next step from your prior books on organizing and living your best life?

Writing “Kurashi at Home” gave me the opportunity to show readers how [to] tidy all aspects of your life, not just your home. Mindful rituals have always been very important to me, and while everyone’s daily rituals will look a little different, explore the ones that encourage you to achieve your best life.

The book goes into more depth about the steps to take to achieve Kurashi. It also offers inspiration throughout via wonderful imagery and my own personal rituals that I hope will help readers better understand how to surround themselves with joy.

How do you approach organizing your digital life?

When it comes to your computer, phone, or tablet files, identifying what exactly sparks joy in this capacity is that your files are organized and tidy, so you can find what you need when you need it.

Digital clutter can be more tedious and time-consuming to sort through, but once it’s done, you’ll feel relief each time you log on. Don’t be afraid to archive and store a majority of your data. If you aren’t using it every day or needing it readily available, it can definitely live elsewhere!

Now that she's a mother, Marie Kondo embraces the occasional mess.
Now that she’s a mother, Kondo embraces the occasional mess.

KonMari Media, Inc.

How has your organizing method evolved since having children?

Since having children, [my] method has not changed but my daily mindset definitely has. It will always stay true to its six basic principles, but since the founding of the method, I’ve become a mother and faced many business changes as well.

Before my children were born, it was easy to completely devote myself to tidying and the growth of the method and business. Now, since having children and learning to juggle my priorities, I have become less critical of messes in my life both literally and figuratively. I try to keep my life in order as much as possible, but with juggling a family and a brand, these days I am OK with—and embrace—the occasional mess.

When one family member—spouse or kids—is messy and other is not, how should they approach finding an organizational system that works for them both?

It can be hard to find middle ground when a family member or roommate has a different living style than you. A few tips I recommend to create a functional, shared organizational system is to find a time that works for everyone, including kids, and commit to tidying and organizing together.

I also recommend dividing and conquering. Maybe your roommate or partner doesn’t mind vacuuming and sweeping, and you prefer to do the dishes and fold laundry—lean into each other’s tidying preferences.

Lastly, if you’re looking to incorporate your children more, I always tell parents to make organizing fun for children. Teach your children that everything has a home so when cleanup time comes around, it can be made into more of a fun game where children will want to tuck their toys into designated spots.

All in all, open dialogue and understanding of preferences can help you develop an organization system where everyone under one roof is held accountable!

Marie Kondo gives a home to every item in her house.
Kondo gives a home to every item in her house.

KonMari Media, Inc.

Working from home is now common. What’s the best way to keep spaces that serve dual purposes—work and personal—organized?

It is vital to keep dual-functioning, work-from-home spaces organized so when you are working from that area, you can have a productive and efficient day.

Go through your desk drawers and toss out old receipts, corral loose change, and recycle paper items that are no longer needed.

Consolidate same-category items versus having them loosely scattered in multiple areas. Office supplies, paperwork, books, and other items should all have a specific home within your desk area.

I also recommend making a clear separation of your professional and personal paperwork. Items like [a] bamboo file divider and organizer or letter and papers tray are a great addition to any desktop to keep important paperwork separate and neat.

You’ve been practicing and teaching your method for years. What new lessons have you learned, and what still surprises you about organization?

Since my first book, I’ve learned countless lessons both professionally and personally. Since meeting my husband and growing our family, I’ve learned how special raising children has been for both of us and helped us lead more fulfilled lives.

With the publishing of my latest book, “Kurashi at Home,” the opportunity to teach people how to apply the method to other areas of their life has been an exciting lesson that I’ve been developing for a while.

Organization is truly an act of self-care, and I am able to practice that craft each day, which is what makes my job feel so special. Tidying my surroundings and practicing a tidy lifestyle is constantly teaching me new lessons, and I cannot wait to continue to explore it further.

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Exclusive: The Star of ‘Luxe for Less’ Reveals His Best Money-Saving Design Hacks To Try in 2023

"Luxe For Less" host Michel Smith Boyd.

HGTV

Need some design inspiration for your home in the new year that won’t break the bank? Interior designer Michel Smith Boyd of the new HGTV show “Luxe for Less” could be just the ticket.

On the show, Smith Boyd helps Atlanta-area clients achieve a high-end look in their home on a budget.

Curious to hear how he does it, we chatted with this design pro to hear some of his top tricks to try in 2023—including a few he’s done (or doing) in his own home.

Michel Smith Boyd brings high-end home design within reach for clients.
Michel Smith Boyd brings high-end home design within reach for clients.

HGTV

To borrow the question you ask clients, what is your version of luxury?

My version of luxury is customization. I want to feel like it’s for me. I want to see my point of view in my home, in my studio, in what I wear. I want to be able to see a little bit of my personality.

What’s your favorite luxe feature in your own home?

Lighting, lighting, lighting! But not just good lighting, great chandeliers. I love light fixtures; it’s really a thing for me.

What part of your home could use improvement?

I am currently working on the lower level, [the] basement. I didn’t have a place where I could just curl up and be comfy. Downstairs, I’m building out a sexy, speakeasy, loungy type of space.

Michel Smith Boyd says to splurge on a luxurious couch.
Smith Boyd says to splurge on a luxurious couch.

HGTV

What are the most common design mistakes you see?

A lot of times we spend money on things we see, that our guests will see, that will make the biggest impression: particular brands or logos and so forth.

Those things are cool, but you know what’s really important? A great mattress and bed, great sofa, great kitchen cabinets, and hardware—things that are really going to add value to the home, but also get the most wear and tear is where the dollars have to go first.

If I had $10,000, I wouldn’t spend $2,000 of it on the coffee table. We’re going to spend that money on the sofa.

When it comes to where to apply those luxury dollars, start with the spaces we can touch [like] countertops. They don’t just look pretty, they’re not just durable, but they feel good. Countertops and floors you shouldn’t skimp on because [they] are things that add value to the home and you don’t want to screw that up when it comes to resale value and also durability. There’s a practicality even in luxury.

The cast of HGTV's "Luxe For Less."
The cast of HGTV’s “Luxe for Less”

HGTV

What are the most clever hacks you’ve come up with to maximize a client’s cash?

That stair runner trick [in Episode 1]: buying three or four of the same runner, and where they meet, you just put it under the stair tread. It was a great solution. We spent about $140 on three runners where it would have been thousands of dollars otherwise.

I [also] used the same paint color and finish on the walls, trim, and ceiling everywhere. A lot of times you [see] flat on the walls and a semigloss on the trim. All that adds money because you’re buying more paint, and also, changing finishes means it might be a separate crew. If you can just spray, as opposed to spraying and painting and [doing] scaffolding, there’s so many ways to save money.

Michel Smith Boyd strategizes with his contractor to stretch the client's cash.
Smith Boyd strategizes with his contractor to stretch the client’s cash.

HGTV

What are your smartest money-saving home design shopping tips?

One of the things I learned about from our contractor is the end-of-a-run flooring [discount], when a manufacturer of a particular tile or hardwood or luxury vinyl tile [is discontinuing a style]. It’s much less expensive.

We [also] bought a scratch and dent range for our client and just changed out one panel. We ordered that separately. It takes a little work, but it’s your home. It’s your biggest investment, so it’s worth doing the research and going that extra step.

The biggest trend I follow is paint colors. It trickles down from fashion on the runways, [and the] next year it’s going to be in interiors when it comes to sofa fabric and things like that. Paint is the easiest, least expensive thing to change. I am still obsessed with greens, and I’m back to white walls. … I’m doing color on the ceiling as opposed to the walls in my bedroom. It still gives me that mood [and] illusion of space.

How would you incorporate bright colors like the 2023 Pantone Color of the Year in homes?

Viva Magenta should go on an old piece of furniture you want to refurbish and have fun with: [a] night table, side table, cabinet, chest, or a dedicated space, like a closet or a powder room.

Michel Smith Boyd sitting at his custom made kitchen countertops.
Smith Boyd sitting in his kitchen featuring custom countertops

HGTV

How often should homes undergo a design upgrade and renovation?

I have been in my place for 16 years, so that’s time for a kitchen upgrade, and I know for sure I’ll see every dime of that in resale. The next thing that’s the most important would be the primary bath: updating plumbing fixtures, hardware—the knobs on the doors or on the cabinets—and lighting.

You’re an artist, and you incorporate art into your interior designs. Any tips to share, since pieces can be pricey?

Buy art locally from local artists that are coming up. You can go to shows on the weekend or fairs and get some really good stuff for very low prices.

What’s your top design tip for 2023?

Feel empowered to make changes in your own home. If you can paint, or if you can create your own art, or if you can create that gallery wall—I love to see those personal touches, and there’s something about that sweat equity at home.

And I would say don’t put so much pressure on yourself; you should enjoy design. People can feel the joy in the interiors that we design. They walk in the house and just lose it because we love what we do and you feel that when you walk through the house. You should enjoy the process.

“Luxe for Less” airs Thursdays on HGTV and is streaming on Discovery+.

The post Exclusive: The Star of ‘Luxe for Less’ Reveals His Best Money-Saving Design Hacks To Try in 2023 appeared first on Real Estate News & Insights | realtor.com®.

Those Who Can’t Afford a Single-Family House Are Increasingly Turning to Build-To-Rent Communities

Build-To-Rent Community

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Many renters crave the extra bedrooms, laundry facility, and backyard big enough for a pair of swings and a slide that single-family houses provide. But they’re facing a for-sale market with still-high housing prices and surging mortgage interest rates, pricing many out of homeownership, at least for now.

But what if you could have that large house without having to come up with a big down payment and get approved for a mortgage?

Many builders are rushing to put up whole communities of single-family homes for rent. And renters seeking more space and privacy—but can’t afford to purchase a home—are turning to this rapidly growing build-to-rent market. While the sector isn’t new, interest ramped up during the COVID-19 pandemic when renters began searching for larger homes, and a greater part of the workforce began working remotely from home.

Sometimes described as “horizontal apartments,” build-to-rent communities are designed and developed with the sole intent of renting out the homes. Over the past few decades, 3% of single-family starts were developed as rentals. By third quarter 2022, that number has jumped to 12%, according to the National Association of Home Builders. 

While investment and planning for new build-to-rent communities had been brewing in the year leading up to COVID-19, the pandemic coupled with rising inflation has contributed to the growing interest as many would-be homeowners are grappling with higher costs, says Robert Dietz, chief economist of the builders association.

“We know that as a result of COVID, a lot of people wanted a single-family structure. They wanted more space,” he says. “We estimate that probably about a third of the workforce is working at home, at least a few days a week. All those factors drive demand for the single-family structure. But of course, not everyone can afford those costs.”

How is a build-to-rent community different?

The build-to-rent communities feature brand-new houses with high-quality finishes as well as a garage and a yard.

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Unlike an apartment rental, single-family rentals in a build-to-rent community offer the lifestyle of homeownership without the added expenses of maintenance or what some call the hassle of owning a home. The homes generally rent for more than a typical apartment.

“We had this idea that if you build new-build homes in a community setting and you put a management, maintenance, and amenity package, much like an apartment, you probably have something pretty attractive,” says Mark Wolf, CEO and founder of AHV Communities. The company is one of the first developers, builders, and operators of luxury, single-family, and attached home rentals.

Since starting in 2013, AHV manages nine communities in Colorado, Texas, and Washington, with six more under construction in Texas, Alabama, and California.

The communities feature brand-new houses with high-quality finishes as well as a garage and a yard. Residents also have access to a fitness center, clubhouse, and on-site management and maintenance in the community.

It’s the low-touch features of a build-to-rent community that draw largely millennial renters and empty nesters looking for a single-family home without the burden of homeownership.

Who is living in these build-to-rent communities?

When we asked millennials why they rent, 4 of the top 5 reasons have to do with affordability.

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Roughly 95% of millennials surveyed by Zonda, a real estate consultancy, want to own a home. The national homeownership rate, however, sits at 66% as of November.

“When we asked [millennials] why they rent, four of the five top reasons have to do with affordability,” says Ali Wolf, chief economist at Zonda.

In today’s market, demand remains high for build-to-rent due to rising mortgage rates, says Devyn Bachman, senior vice president of research at John Burns Real Estate Consulting.

Rates averaged around 6.3% for 30-year fixed-rate loans, a sharp rise from the mid-3% range at the start of the year, according to Freddie Mac data.

“It’s more expensive than ever to own a home, ” says Bachman.

For instance, in San Antonio, TX, the cost to own a three-bedroom, two-bath house listed at $289,700 with a 5% down payment on a 30-year fixed-rate mortgage (including principal, interest, taxes, and insurance), along with mortgage insurance and a maintenance assumption, is about $2,800.

In comparison, AHV Communities’ Farm Haus build-to-rent community in San Antonio is renting out three-bedroom, 2.5-bathroom duplex homes from $2,200 (1,365 square feet) to $2,400 (1,415 square feet) a month.

Wolf adds that rental prices for each AHV-owned community are determined by the number of amenities, the layout, and the local rental market.

Is the dream of homeownership dead?

Is the American dream of homeownership vanishing? It depends on whom you ask.

Homeownership has long been a way that people have been able to build wealth over time that can be passed on to future generations. But the nation is in a dire housing shortage resulting in high prices and not enough properties to go around.

Those high prices and shifting attitudes have made it more acceptable to rent for longer—if not forever.

Still, the state of the current housing market does not mean that homeownership will be unattainable forever.

Dietz, of the homebuilders association, notes that the U.S. Federal Reserve won’t keep raising interest rates forever and at some point mortgage rates will fall below 6% again. When that happens, demand for homes to own is likely to increase again.

“We want to focus on getting households into homeownership. It makes for better citizens and wealth accumulation,” Dietz says.

But what build-to-rent communities do offer is an alternative housing solution, says Bachman of John Burns.

“A lot of people would rather live in this style of [housing] over an [apartment or condo building] where they have to have someone next to them or on top of them,” she says.

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Will High Inflation and Recession Fears Lead to a Drop in Remodeling?

Woman remodeling her home

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During the height of COVID-19, it seemed like everyone knew someone who had bought a home and then remodeled the kitchen, created a home office or gym, or turned the scraggly backyard into an outdoor oasis.

But as the pandemic enters its fourth year, most folks are no longer trapped in their homes obsessing over every flaw. The homebuying frenzy that typically spurs remodeling work has died down. And many people are more concerned with high inflation and the looming threat of a recession than their dream en suite bathroom.

Where does that leave the remodeling industry? In fairly good shape, say most experts. Homeowners are expected to spend even more on remodeling, repairs, and maintenance in 2023 than they did in 2022.

“We are expecting the market to continue to grow, just not nearly as fast as it was the past couple of years,” says Abbe Will, a senior research associate at the Harvard Joint Center for Housing Studies. “Even if we are in a recession in 2023, I wouldn’t necessarily expect the renovation market to decline.”

Homeowners are projected to spend $448 billion nationally in the first quarter of 2023, according to the center. That’s about a 34.1% increase from the $334 billion homeowners spent in the first quarter of 2020, according to data from the center’s Leading Indicator of Remodeling Activity, or LIRA.

The nation’s housing stock is aging, and older homes are more in need of repairs, maintenance, and updates. And despite the turmoil in the economy and financial markets, homeowners have high levels of equity they can tap to fund the work.

“These things will continue to prop the remodeling market up,” says Paul Emrath, vice president of survey and housing policy research at the National Association of Home Builders. “People have savings and equity in their homes … so they’re not as dependent on loans.”

Homeowners aren’t slowing down their remodeling work

Even with the number of home sales dropping dramatically and the increasingly worrisome state of the economy, just 1% canceled their remodeling plans in 2022, according to a survey of nearly 4,000 Houzz users in mid-October.

“We are expecting nearly half of homeowners to renovate in 2023,” says Houzz economist Marine Sarsyan. “This might be less than the actual share who renovated in 2022, though [it’s] still a significant activity for the industry.”

Many homeowners are holding off on their plans to trade up or down into new homes in the face of high mortgage interest rates and the risk of a recession. So they might be more likely to pivot away from nonessential remodels, like installing new kitchen cabinetry or adding a sunroom, and in favor of replacing a roof or boiler system if they plan on being in the property for longer.

“Replacement projects, like roofing and systems and equipment, the parts of the home that can wear out, need to happen sooner or later,” says Will. “We do have an aging housing stock.”

The top system upgrades were electrical, plumbing, heating, and security, according to a Houzz survey.

Meanwhile, the most popular room renovations were bathrooms and kitchens, according to Houzz. Homeowners updating the exterior of their residence were most likely to install new windows, skylights, and doors; paint the outside of their abodes; and improve their porches, balconies, and decks.

The remodeling industry still faces some challenges

While homeowners will continue to spend more on remodeling in 2023 than they did in 2022, the rate of growth will slow, especially as the number of home sales drops.

Emrath anticipates some homeowners will scale back the extent or the cost of their remodels, especially as higher interest rates make loans more expensive.

Remodelers were still upbeat in the third quarter of this year, although their optimism has waned over the past year, according to a National Association of Home Builders remodeling index. That could be at least partly due to the impact of fewer home sales projected in the year ahead.

“A lot of remodeling does tend to happen around the sale of a home,” says Will. Sellers spend money fixing their residences and getting them ready to put on the market. Then “recent buyers tend to spend quite a lot more in the first few years after buying a home.”

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‘Tis the Season To Be Jolly: These Are the Most Festive States for the Holidays

A father helping his daughter decorate their Christmas tree at home

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For generations, the vision of coming home for the holidays has been feasts with family and friends, garlands and mistletoe hanging overhead, and homes decked out in lights as it snows lightly outside.

But some parts of the country get more into the holiday spirit than others. And while certain holiday decorations are perennially popular, others have fallen out of favor.

The most festive city in the nation for holiday decorations is Las Vegas, according to a recent study commissioned by Michigan-based home builders Lombardo Homes. (The study looked at how much residents searched for holiday decorations online per capita.) It was followed by Denver, Baltimore, Nashville, TN, and Dallas.

The botanical gardens at the Bellagio Hotel and Casino during Christmas in Las Vegas, NV.

Getty Images

Meanwhile, New York City led the list of America’s least festive cities, trailed by Los Angeles, Phoenix, Chicago, and Silicon Valley’s San Jose, CA.

“It was surprising to see our nation’s two largest cities come in at No. 1 and No. 2 for least Christmas cheer,” says Maria Szatkowski, who worked on the report. “Even though tourists flock to the famous Rockefeller Christmas tree each year [in New York City], based on the Google search trend data, Las Vegas residents are more interested in decking the halls and making their homes festive for the season.”

(To come up with its findings, Lombardo Homes analyzed nearly 8,000 search terms on Google that were related to Christmas decorations. They compared the results with the national average to determine each state’s most popular holiday decorations. To find the most festive states, the builders looked at how much residents of the 30 largest cities in the nation were searching for holiday decorations per capita. They also surveyed more than 1,000 Americans on holiday decorations.)

The most holiday-obsessed state for decorations is Alaska, trailed by Delaware, Maine, Hawaii, and Idaho

Meanwhile, New York state was the least festive state for decorations. Washington, Minnesota, Ohio, and Oregon weren’t far behind.

This year, the most popular decoration in U.S. homes remained the Christmas tree.

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The majority, 80%, of Americans say they’re planning to decorate for the holidays, spending an average of four hours doing so, according to the report. About 20% of folks begin putting up lights and other decorations before Thanksgiving, 48% do so in November, and 32% wait until December.

This year, the most popular decoration in U.S. homes remained the Christmas tree, according to the study. About 67% of Americans prefer real trees to 33% who choose artificial ones.

The Christmas tree was followed by garlands, Christmas lights, mistletoe, and snowmen. Rounding out the top 10 were stockings, wreaths, Nativity scenes, angels, and stars.

Not ironically, snowmen decorations topped the list in America’s coldest and snowiest states, including Colorado, Illinois, and Minnesota.

“No matter where you live, and no matter how much (or how little) people around you get into the Christmas spirit, the ability and lengths you go to decorate are ultimately up to you,” says Szatkowski.

Santa Claus is the most popular decoration in Alaska.

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(The states are ordered from most to least festive.)

  1. Alaska: Santa
  2. Delaware: Lights
  3. Maine: Window candles
  4. Hawaii: Santa
  5. Idaho: Nativity scene
  6. Connecticut: Christmas tree
  7. Kansas: Lights
  8. Massachusetts: Window candles
  9. Kentucky: Nativity scene
  10. Maryland: Lights
  11. Iowa: Stocking
  12. Arkansas: Lights
  13. Alabama: Nativity scene
  14. Colorado: Snowman
  15. Georgia: Christmas tree
  16. Illinois: Snowman
  17. Indiana: Christmas tree
  18. Louisiana: Stocking
  19. Michigan: Christmas tree
  20. Florida: Christmas tree
  21. Arizona: Mistletoe
  22. California: Mistletoe
  23. Vermont: Christmas tree
  24. Rhode Island: Poinsettia
  25. West Virginia: Reindeer
  26. New Hampshire: Reindeer
  27. Wyoming: Nativity scene
  28. North Dakota: Lights
  29. South Dakota: Snowman
  30. Utah: Star
  31. Montana: Angel
  32. Nebraska: Garland
  33. South Carolina: Wreath
  34. North Carolina: Star
  35. Tennessee: Wreath
  36. New Mexico: Nativity scene
  37. Texas: Garland
  38. Nevada: Reindeer
  39. Mississippi: Stocking
  40. Virginia: Christmas tree
  41. Missouri: Lights
  42. Pennsylvania: Window candles
  43. Oklahoma: Nutcracker
  44. Wisconsin: Nutcracker
  45. New Jersey: Wreath
  46. Oregon: Christmas tree
  47. Ohio: Christmas tree
  48. Minnesota: Snowman
  49. Washington: Lights
  50. New York: Snowman

The post ‘Tis the Season To Be Jolly: These Are the Most Festive States for the Holidays appeared first on Real Estate News & Insights | realtor.com®.

Behind the Scenes of ‘Buying Beverly Hills’: 5 Shockers About the 90210 ZIP Code—and the State of Reality TV

The cast and realtors from the Buying Beverly Hills series on Netflix

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Every tony neighborhood seems to have its own reality TV show these days—think “Million Dollar Listing Los Angeles,” “Selling Sunset,” and “Selling the OC,” among others. So it’s high time that the most famous ZIP code of all has finally joined the club.

We’re talking, of course, about 90210, which is the subject of the new series “Buying Beverly Hills.” Now airing on Netflix, this show features the behemoth real estate enterprise known as The Agency forging deals for the rich and famous on some of the most luxurious properties in this affluent Los Angeles suburb and surrounding area.

The Agency’s charismatic CEO and co-founder Mauricio Umansky might look familiar to fans of “The Real Housewives of Beverly Hills,” since he’s the husband of original cast member Kyle Richards.

buying beverly hills
Mauricio Umansky of “Buying Beverly Hills”

Courtesy of NETFLIX/© 2022 Netflix, Inc.

With the couple’s two daughters also working at The Agency, you have the ingredients for a fairly juicy family drama set against the breathtaking backdrop of some of the world’s most remarkable residences.

But there’s more to “Buying Beverly Hills” than a good helping of gorgeous real estate and office drama. To shed light on the nuances of this show and what happens behind the scenes, Umansky and the cast invited me to spend the day shadowing their every move and touring a bevy of beautiful homes. I came across a number of things that might really surprise you. As you might suspect, all is not as it seems on reality TV.

1. 90210 is no longer the swankiest ZIP code in town

The Agency’s office, of course, is in the heart of ZIP code 90210. It’s gleaming and stylish, done in almost all white with pops of lipstick red. The walls are glass, and there is not one private office in the place. Even Umansky’s office is a fishbowl.

buying beverly hills
Left to right: Santiago Arana, Ben Belack, Mauricio Umansky, and Joey Ben-Zvi of The Agency.

Courtesy of NETFLIX/© 2022 Netflix, Inc.

Yet despite The Agency’s fitting location in prime 90210 territory, most of its agents don’t live in Beverly Hills—including Umansky.

Even though Umansky and Richards star in two shows with “Beverly Hills” in the title, the couple actually live in Encino, CA. It’s an uber-exclusive pocket of the San Fernando Valley, and the homes here are just as lavish as what you’ll see in Beverly Hills.

Umansky and Richards live in Smokey Robinson‘s estate, which they bought in 2017 for $8.3 million.

You’ll see their house quite often on the show, and I can confirm that it ranks among the best of Beverly Hills. (And dare I say, the neighbors are a wee bit warmer? It seems folks who live there don’t have as much to prove.)

As further proof that Beverly Hills is not the be-all and end-all of where to live, only one of the mansions for sale that I toured during my day with The Agency was located in Beverly Hills. Even though 90210 has been lauded as the most expensive ZIP code in Los Angeles, many celebrities, pro athletes, and titans of business now choose to live in other equally posh neighborhoods nearby, including Bel-Air, Pacific Palisades, Brentwood, and Venice.

One of the things that make “Buying Beverly Hills” unique is that it’s very much a family affair. Umansky’s father, Eduardo, started in the real estate business decades ago and is still involved with The Agency. And Umansky’s two daughters are integral parts of the business and the show.

buying beverly hills
Sisters Alexia Umansky and Farrah Brittany

Courtesy of NETFLIX/© 2022 Netflix, Inc.

Farrah Brittany (Richard’s daughter from her first marriage) is a consummately cool agent who has been with The Agency since its inception. She has achieved nearly $4 billion in real estate sales.

Alexia Umansky, the couple’s younger daughter, had been with The Agency for only several months when filming started. Although the 26-year-old has been shadowing her father for years, there’s still a lot she needs to learn about the business.

Mauricio Umanski and daughters Farrah Brittany and Alexia Umansky
Farrah, Mauricio, and Alexia

Courtesy of NETFLIX/© 2022 Netflix, Inc.

Of course, there’s some nepotism going on.

“She’s my baby,” Mauricio exclaims on the show as he gives Alexia listing opportunities that other agents (including her older sister) doubt she’s ready for, among them her childhood home in Bel-Air.

They also don’t pull any punches, showing Alexia making mistakes. The show highlights some excruciating moments, including times she’s stumped by homebuyers’ questions.

“I just wasn’t prepared,” Alexia tells me regretfully.

Mauricio informing his daughters
Umansky talking to his daughters

Courtesy of NETFLIX/© 2022 Netflix, Inc.

3. However glamorous, being a luxury real estate agent is hard

Female cast members of "Buying Beverly Hills"
Female cast members of “Buying Beverly Hills”

Courtesy of NETFLIX/© 2022 Netflix, Inc.

You’ve seen TV real estate agents swanning around gazillion-dollar mansions in designer suits, makeup expertly applied and not a hair out of place. What’s easy to miss is that their job can be grueling.

Some of the agents I met at The Agency said the hardest part of the job is convincing an elite seller that you’re the one who should list the home, or an upscale buyer that you’re the one who can find the ideal dwelling—and that the effort can take weeks or months.

Melissa Platt, the self-described villain on the show, doesn’t deal with the listings side. She’s one of the nation’s leading buyer’s agents and specializes in finding homes for top athletes, then helping them move, decorate, and find services so their lives are as stress-free as can be.

Buyers' agent Melissa Platt
Buyer’s agent Melissa Platt

Courtesy of NETFLIX/© 2022 Netflix, Inc.

All her clients have to do is sign the deed or the lease and show up—they don’t even need to bring a toothbrush. She’ll have their pantries stocked, their beds made, their homes fully staffed, and even their closets filled with the right-sized clothes, their bathrooms with their favored toilet paper. Sound easy? We didn’t think so.

4. Being a real estate agent on TV is even harder

While being a real estate agent is harder than it looks, when a reality show is added to the mix, the challenges multiply.

Platt, for instance, had to audition five times to join the cast. But that was the easy part compared with what cast members have to do: convince their clients that they, too, should star on “Buying Beverly Hills.”

“The most difficult part of being on the show is convincing the sellers to let us show their homes on TV,” says agent Ben Belack.

While an agent can get invaluable exposure from being on TV, there’s not much value in it for the seller, because by the time the show airs, the home would have likely been sold already, Belack explains.

There are exceptions, however.

The developers of ultraluxe mansions in the $100 million-plus price range know their newly built properties could take months, if not years, to sell. That’s why you’ll see megamansions such as this $139 million property (below) on the show: It’s free marketing for the house.

$139 million mansion
$139 million mansion

Realtor.com

Real estate agent Santiago Arana, a Bolivian immigrant who works with clients such as LeBron James, develops some of the area’s most prestigious properties. He took me on a tour of a $25.8 million Beverly Hills mansion he’d developed that features a wellness center (a humble “home gym” is not enough anymore) and a 100-foot infinity pool with a 12-person spa and a swim-up bar.

buying beverly hills
A $25.8 million mansion listed by Arana

Realtor.com

Mauricio took me on a tour of a $16 million mansion in Hollywood Hills. Sitting on a lot with remarkable city and ocean views, this not-quite-completed aerie has two wings—one for private family living, the other for entertaining or business. (They’re connected underground.)

The unique layout was inspired by the COVID-19 pandemic—a place where people could feel comfortable living, working, playing, and entertaining, all in one place, he explains.

buying beverly hills
$16M mansion represented by Umansky

Realtor.com

5. Reality TV shows aren’t just about stardom

So why would Mauricio choose to open himself, his family, and his agents to public scrutiny?

“The idea behind this is really to support all of us,” he says at a party at the office to celebrate the premiere of “Buying Beverly Hills.” “A high tide lifts all boats.”

buying beverly hills
A party at the office to celebrate the premiere of “Buying Beverly Hills”

Courtesy of NETFLIX/© 2022 Netflix, Inc.

Looking at the group of agents gathered, with bubbly in their hands, Mauricio says he envisions future shows such as “Buying London” and “Buying Miami.”

Or even “Buying the 818,” he jokes, referring to the area code where his own home is located.

The post Behind the Scenes of ‘Buying Beverly Hills’: 5 Shockers About the 90210 ZIP Code—and the State of Reality TV appeared first on Real Estate News & Insights | realtor.com®.

America Is Divided—by Home Prices: Here’s Where the Affordable Homes Are Hiding

America divided by home prices

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When it comes to demand for real estate, certain areas of the U.S. are hot—and others definitely are not. And the most in-demand spots right now aren’t those balmy climates you might presume people pine for this time of year.

For the sixth month in a row, warm, sunny, formerly desirable Western markets are nowhere to be found in the Realtor.com® 20 Hottest Markets rankings. The Southern markets haven’t charted on this list for two months. Instead, the hottest markets of November are clustered in the snowy Midwest and Northeast, spread out across 11 states.

It’s not the possibility of building snowmen or carving ski runs that’s drawing homebuyers to these regions; it’s the relatively low home prices.

(The hottest markets report factors in a combination of demand measured by the number of unique views per listing and how quickly properties sell measured by the number of days on the market.)

“A notable number of metros in the Western and Southern states have seen affordability decline this year,” says George Ratiu, manager of economic research for Realtor.com. “In contrast, markets in the Northeast and Midwest have seen a more moderate price trajectory.”

Indeed, the average listing price for the 20 hottest metros in November was $324,000, about 22.2% lower than November’s national median of $415,750. (Metros include the central city and the surrounding suburbs, towns, and smaller urban areas.)

With those savings, it’s little wonder that homes in these markets received 1.8 times as many page views on Realtor.com compared with the typical real estate listing on the site.

The Northeast’s remarkable hot streak

The most sought-after town for home shoppers in November—for a whopping 11th time in the past 12 months—was Manchester, NH.

While Manchester’s home prices are a bit on the pricier side at $487,000, the metro is still a relative bargain compared with the nearby hub of Boston. (Home prices in Beantown tipped the scales at $740,000 in November.)

And Manchester offers other bottom-line bonuses—namely, New Hampshire residents don’t have to pay any state sales or income tax.

But it wasn’t just the Live Free or Die state drawing home shoppers. The Northeast nabbed a total of nine spots on November’s Hottest Markets list, with Massachusetts, New York, and Connecticut joining New Hampshire.

Rochester, NY, the second-hottest market on the list, had a median home price of just $226,000 in November.

“Many buyers, and especially first-timers, found they hit a financial ceiling on their journey toward homeownership,” says Ratiu. “Midsize and smaller metro areas located near large employment centers, which offer good quality of life, desirable amenities, and affordable housing, have gained higher visibility.”

Sweet home Indiana

Cash-strapped buyers also flocked to the mighty Midwest, with Indiana capturing the most spots—a total of three—on the Hottest Markets list.

Bargain-hunting home shoppers were drawn to Fort Wayne (No. 5), Lafayette (No. 17), and Elkhart (No. 18), which all had homes priced at $302,000 or less. That’s more than $100,000 below the national average.

And as rising inflation gnaws away at household budgets, home shoppers wasted no time when they found an affordable home. Homes in the hottest markets were snapped up 25 days faster than the average property.

“Sellers are coming to the realization that the market has shifted, and those that price their home correctly will benefit the most from a faster sale, smaller carrying costs, and more money,” says Ben Jones, founding agent of Compass Indiana and leader of The Jones Team.

How mortgage rates affected America’s hottest markets

It’s little wonder home shoppers are forgoing pricey properties for budget-friendly alternatives, even if buyers do have to shovel a driveway now and then: They’re seeking relief from not only high home prices, but also skyrocketing mortgage rates, which have risen from the low 3% range at the start of the year to about 6.3% as of last week, according to Freddie Mac. (This is for 30-year fixed-rate loans.)

“A mortgage payment for a median-priced home is about 65% to 70% higher than last year,” explains Ratiu. That means the typical homebuyer is paying nearly $1,000 more a month for the same home.

Yet, though buyers have to pay more in monthly mortgage costs, they finally have bargaining power. Homes are lingering on the market, driving up the total number of properties for sale. And more homes mean that sellers have to slash prices in order to compete.

So as we hurtle toward the end of the year, future buyers should take note that homes are seeing price reductions at levels not seen since 2017.

“As markets are moving toward more balance, buyers will find more choices and less competition,” says Ratiu.

The post America Is Divided—by Home Prices: Here’s Where the Affordable Homes Are Hiding appeared first on Real Estate News & Insights | realtor.com®.

Rental Prices Stop Zooming Up—and Even Drop in Some Parts of the Country

Home for rent

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In a welcome relief for tenants, rents began falling in earnest in November in some formerly red-hot real estate metros.

Arizona, Florida, and Texas saw massive rent increases in many cities during the COVID-19 pandemic. But now rent is beginning to decline in some Sun Belt cities for the first time in nearly two years, according to a recent Realtor.com® report that looked at rental prices in the nation’s 50 largest metros. Rents fell in places like Phoenix, Tampa, and Austin in November compared with a year ago—a big difference from the past few years of ever-increasing costs.

Rents are still growing nationwide, but they’ve slowed significantly from a peak reached in January. The growth rate hit its lowest point in over a year and a half in November, rising 3.4% year over year to reach $1,712 a month. While any hike is unwelcome news for renters, it’s much lower than the 17.4% annual surge at the start of the year.

“The rental market continues to cool down, which is a relief,” says Realtor.com economist Jiayi Xu. “But the rent is still higher than this time last year, which means there will continue to be affordability issues.”

In spite of the slowdown, rents are still considerably higher than their pre-pandemic levels nationwide. The median rent in the top 50 U.S. metros is $308 more than it was at the same point in 2019.

This Realtor.com rental report was based on rental listings of studios and one-bedroom and two-bedroom units listed on Realtor.com. National rent on average was found by averaging median rents for each of the nation’s top 50 metropolitan areas. (Metros include the main city and surrounding towns and smaller urban areas.)

Sun Belt metros see declining rents

Sunny cities in the South are leading the march back down toward a more normal asking rent. All of the metros where prices fell were in the Sun Belt.

“They are cooling faster than all the other parts of the country. One of the major reasons: We’re almost at the end of the pandemic, and people are moving back to big cities like New York or Boston,” says Xu. “The moving trend has changed, people are moving back from cheaper areas into big, urban cities.”

Riverside, CA, led the pack with a -5.5% rent growth between November 2021 and 2022. Las Vegas (-4.9%) and Sacramento, CA (-4.8%), were close behind. Overall, Sun Belt metros still saw a year-over-year growth in rents, but the rate of less than a percent was well below the national average.

Small comfort for renters

Rents are expected to continue to grow, just at a slower pace than the rapid leaps seen over the past two years. The supply of homes available for renters is limited by the lack of new construction and the influx of would-be buyers who can’t afford a home of their own due to high for-sale prices and mortgage interest rates. Fewer buyers mean more renters, and more renters increase demand for whatever is available, likely feeding into continued rent growth in the short term.

However, a recent focus on multifamily residential buildings on the part of developers might relieve some of the pressure created by a larger overall market of renters, eventually leading to a decrease in median rents.

The post Rental Prices Stop Zooming Up—and Even Drop in Some Parts of the Country appeared first on Real Estate News & Insights | realtor.com®.

Is the Housing Market in a Bubble? How Today Compares With the Great Recession

Housing Market in a Bubble

Photo-Illustration by Realtor.com; Photos: Getty Images (2) / Realtor.com

It’s like déjà vu in the housing market.

Just a few months ago, home prices hit record heights, investors were gobbling up scores of homes, and buyers were racing to purchase whatever they could before prices rose even further. Then, quite suddenly, the market seemed to seize up and prices and sales began falling.

Sound familiar?

Last month, Federal Reserve Chair Jerome Powell said the COVID-19 pandemic market had been in a “housing bubble.” But it was likely rising mortgage interest rates, a result of the Fed hiking its own rates to bring down inflation, that most directly led to the real estate freeze. The culprits were not subprime mortgages, wild speculation, or overbuilding—the primary causes of the housing crash of the late aughts.

And while just about every real estate expert has a slightly different definition of a housing bubble, all strongly agreed that our current housing market, however stressed, does not closely resemble the one that led to the last crash.

“Your everyday person on the street, when they hear ‘bubble,’ they probably think there is a rising risk that home prices will crash,” says Realtor.com® Chief Economist Danielle Hale. “There are some warning signs, [a feeling that] something has to adjust. … [However,] there are some indications that we’re in a much healthier place than we were in 2008.”

If Powell is right, and the market is indeed a bubble, it might be a type we haven’t encountered before. This time around, there isn’t a glut of available housing, the subprime loans that got so many homebuyers in trouble in the mid-2000s have largely been eliminated, and millions of Americans aren’t likely to lose their homes to short sales and foreclosures.

Something new and dramatic would likely be necessary in order to set off another collapse.

“There’s no formal definition of ‘bubble,’ so people can call it whatever they want,” says Bill McBride, an economics blog writer at Calculated Risk who predicted the last housing bust. “The real question is what’s going to happen.”

Unquestionably, the housing market has taken a vicious beating lately. Higher mortgage rates have made homebuying unaffordable to millions, decimating the ranks of home shoppers. Homes are now sitting on the market longer, more sellers and builders are slashing prices, and sales are evaporating. Sellers now often have to make concessions, sometimes even expensive ones, to get a sale across the finish line.

“This is not a replay of the Great American Housing Bubble,” says real estate and finance professor Susan Wachter, of The Wharton School of the University of Pennsylvania. And she’s in a position to know: She’s the co-author of “The Great American Housing Bubble: What Went Wrong and How We Can Protect Ourselves in the Future.”

“Mortgage rates have more than doubled from last March, so it’s not surprising that housing prices in many markets are falling and flatlining across the country,” says Wachter.

So how does today’s housing market compare with the run-up to the Great Recession? That depends on where you’re looking.

Home prices have risen, but that doesn’t mean a bubble will burst

The fast-rising home prices during the pandemic might have elicited uncomfortable flashbacks to the multiyear ramp-up to the Great Recession. From 2000 to 2005, median home list prices rose an average of $1,243 a month, according to an analysis of Realtor.com data.

As high as that seems, median home list prices from 2020 to 2022 saw an average jump of $4,410 every month.

“It was more of a frenzy than a bubble,” says Eric Finnigan, vice president of research and demographics at John Burns Real Estate Consulting. “Prices skyrocketed over the last two years, and then spiking mortgage rates were the tipping point.”

From the peak in June of this year, home prices have fallen 7.4% through November as mortgage rates have risen. Home prices are typically highest in the summer and then fall during the colder months. But this is a substantially larger drop than usual.

It’s worth noting that home prices are still up considerably year over year—11% higher in November than they were last year. Realtor.com forecasts they’ll go up 5.4% nationally in 2023.

“The rate at which prices were going up in 2021 and 2022 was unsustainable,” says Hale.

The housing market of the early 2000s was predicated on the rather unlikely idea of prices rising indefinitely.

Many people bought homes they couldn’t afford, assuming that prices would keep going up and they could keep refinancing their loans. But once prices began falling, their strategy backfired and many of those properties wound up in foreclosure.

The last housing bubble was protracted and painful, dragging the world’s financial markets down along with it. Home prices didn’t bottom out until 2012, according to existing-home sales data from the National Association of Realtors®.

Economists say it’s different this go-round. Prices rose because there weren’t enough homes for sale to meet demand. And mortgage rates bottomed out to record lows in the mid-2% range, making it possible for buyers to afford higher prices as they weren’t paying as much interest. So prices climbed.

“The market is overvalued now. Prices have gotten way ahead of incomes, rents, and construction costs,” says Mark Zandi, chief economist at Moody’s Analytics. “The market is now correcting. … Over time, affordability will be restored and the market will find its footing.”

He anticipates prices will fall up to 10% nationally over the next two to 2.5 years. If there is a recession, prices could fall nearly 20%. While this sounds like a lot, context is important: Home prices are up 39% since January 2020.

Most economists don’t anticipate another foreclosure crisis, which would flood the market with cheap homes, dragging prices down even further. Most mortgages made in the aftermath of the Great Recession don’t balloon over time, putting homeowners in jeopardy of not being able to make their monthly payments. So unless homeowners lose their jobs, they should be able to hang onto their properties.

Home sales peaked and are now falling—just like in the 2000s

Another hallmark of the Great Recession was that, as the housing market imploded, the number of home sales cratered. Something similar might be happening today.

In 2005, sales peaked at just over 7 million, according to NAR’s existing-home sales data (which excludes new construction). Just three years later, sales bottomed out at 4.11 million.

Sales surged last year, hitting 6.12 million, the highest number since 2006. NAR expects there will be 5.22 million this year before the number of sales falls into the 4 million territory in 2023 as high mortgage rates continue to price many buyers out of the market.

Sales dropped for nine straight months this year, according to NAR data. (November and December data aren’t yet available.)

“We expect home sales to slow dramatically in 2023,” says Hale. “It means fewer new first-time homeowners celebrating, and that’s sad.”

A steep drop in sales, however, doesn’t mean the housing market is crashing. If home prices continue to dip and mortgage rates fall into the 5% range, closed home sales will likely pick back up again. (Rates are currently in the low 6% range after surpassing 7% last month. These are for 30-year fixed-rate loans using Freddie Mac data.)

This time, the housing market also has the population on its side, big-time.

In the mid-2000s, the number of people in their early to mid-30s, when folks traditionally become homeowners, was shrinking, according to U.S. Census Bureau data. The population of those aged 30 to 34 dropped by nearly 1.5 million from 2002 to 2007.

Today, thanks to the vast number of millennials, that population is growing. The number of 30- to 34-year-olds increased by nearly 1.25 million from 2016 to 2021.

That demand, plus rates falling into the low 6% range, might lead sales to pick up at least a little.

“In the next couple of months, we’re going to see a slower slowdown, says Nadia Evangelou, director of real estate research at NAR.

The housing shortage should help to prop up the market

One key difference between then and now is the number of homes for sale. In the 2000s, there was a glut of housing with many more listings than there were buyers. During the pandemic, the opposite was true.

There were more than three times as many existing homes for sale in the run-up to the housing crash of the 2000s compared with today, according to data from the NAR. In October 2007, 3.9 million homes were on the market—compared with just 1.2 million in October of this year.

And while the number of homes for sale is expected to rise, it won’t be nearly as much.

“Now we’re in a severe housing shortage,” says NAR’s Evangelou. Potential sellers are loath to give up their low mortgage rates, so they’re staying put rather than trading up or down into new homes. And builders are slowing down much-needed construction.

Mortgage lending is not nearly as risky

In the early 2000s, it wasn’t exactly hard to snag a home mortgage. Real estate experts liked to joke that their dogs could have gotten loans.

And while that might be an exaggeration, plenty of mortgages were doled out to people who lied about their incomes and employment, and couldn’t actually afford homeownership.

In the aftermath of the meltdown, lending standards were tightened. It’s been harder for borrowers to qualify for mortgages—lenders want a reasonable expectation that borrowers can pay back what they owe. And the shady, subprime loans that got millions of homeowners into trouble have largely been eradicated from the market.

“Lending since the financial crisis has been very good,” says Moody’s Zandi. “The mortgages people have taken on are plain vanilla, fixed-rate.”

And buyers haven’t been maxing themselves out as much as they did in the 2000s to purchase real estate. That’s according to the Board of Governors of the Federal Reserve System when looking at mortgage payments compared with the disposable income of households.

“In 2022, people who bought houses are in much better financial positions,” says Finnigan, of John Burns Real Estate Consulting.

New construction and investors haven’t gone wild

Two of the primary early 2000s bubble indicators—irrational exuberance in homebuilding and investing—are different this time around.

In January 2006—prime time for the ramp-up to the housing crash—there were 1,826,000 homes under construction, according to the National Association of Home Builders and U.S. Census Bureau data. Then builders slowed down construction considerably, and many companies went out of business as there were more homes than there were buyers during the financial crisis.

As the nation made its way out of that bleak period, the next peak in home construction was 1.3 million units in December 2020. That’s since fallen to just 855,000 homes in the works in October.

“Builders are building fewer homes, so we don’t expect inventory to increase significantly,” says Evangelou.

And while investors did jump into the market in larger numbers during the pandemic, experts aren’t unduly worried that their activity will precipitate another crash.

Flips steadily rose in the 2000s, hitting a high of 8.8% of all home sales in the second quarter of 2008 before they began falling, according to ATTOM, a real estate data firm. Flips didn’t peak again until the first quarter of this year, when they hit 9.7% of sales. They since dropped to 7.5% in the third quarter.

The most recent spate of flippers includes iBuyers—large companies that bought up real estate quickly and cheaply, made fixes, and then put those homes back on the market—as well as mom and pop investors. Many of the iBuyers have since scaled down their purchases or left the business entirely. And the smaller investors who financed their deals generally did so with much more solid loans than they did in the years leading up to the Great Recession.

“If you don’t have a lot of flippers, you don’t have a bubble,” says Moody’s Zandi.

Could higher mortgage rates or a recession sink the housing market?

Rising mortgage rates aren’t a problem on their own. Rates topped 8.6% in 2000 and were in the 5% to 6%-plus range in the early to mid-2000s. That’s about where they are now, averaging 6.31% for a 30-year fixed-rate loan in the week ending Dec. 15, according to Freddie Mac data.

The difference is home prices were so much less before the Great Recession.

Median home prices didn’t top $200,000 until 2005, according to NAR’s existing-home sales data. They were a median of $347,883 last year.

Rates become worrisome when they shoot up quickly and buyers are priced out.

“If mortgage rates spiked again, that will do a lot of damage,” says Zandi. If they hit 9% or 10%, “that will completely obliterate affordability, prices would fall much more sharply, and it could cause a crash.”

Many fear the Fed might steer the nation into a recession by raising interest rates to fight inflation. But even if the Fed fails in engineering its soft landing in the economy, most real estate experts don’t expect the resulting downturn to be as devastating as the Great Recession.

“There’s nothing flashing red,” says Zandi. “Even if we have a recession, it wouldn’t be as deep or as long as a typical recession.”

Ultimately, the question of whether we’re currently living through another precarious housing bubble might not become clear for months, or even years.

“People usually know it when they see it,” says Hale. “But it’s more obvious in hindsight.”

Evan Wyloge contributed to this report.

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