If you ever had the thought of buying a home in the last 6 months this thought definitely has crossed your mind.
Is it possible that home prices will start to drop in 2023? While the short answer is yes. We believe that it will be a less than critical movement in the housing market.
The main reason housing prices are so elevated right now is the fact there’s not enough real estate supply to meet buyer demand. But if buyer demand declines next year due to recession concerns (or an actual recession) and higher borrowing costs, it could lead to lower property values.
If a recession does hit and there’s a significant decline in demand for homes, then home prices would likely follow suit. However, this isn’t necessarily a bad thing for homeowners who want to sell their homes or for those who are looking for a home purchase in the new year.
But all in all things won’t be so bad!
For starters, if you’re thinking about selling your home in 2023, then you may want to consider doing so sooner rather than later if you’re worried about a real estate market crash happening later next year. There’s no guarantee that prices will drop dramatically next year—they could even continue rising if we see an economic recovery—but if they do fall significantly during a recessionary period (as they did during the Great Recession), then now would be the time to sell before those drops happen.
But there’s a big difference between a drop in home prices and a full-blown housing market crash. And while the former is a strong possibility, the latter is less likely for one big reason — there’s a lot of “down” to go.
Right now, home prices are very elevated compared to where they were a year or two ago. If home prices decline 10% or 15%, it won’t necessarily create a national crisis where millions of homeowners are under on their mortgages. Rather, it just may be the case that sellers can no longer walk away with the massive profits they’d be looking at today.
For example, let’s say you buy a $560,000 home in 2020 that is now worth $620,000. If the value of that home drops to $600,000 in 2023, that doesn’t mean its value has crashed — it just means it’s lower than it was at its peak.
We believe that you should prepare for lower home values. But not a market crash
While the housing market is unlikely to crash in 2023, sellers should expect property values to creep downward. And so those interested in finding a buyer should get moving with a listing sooner rather than later.
Buying or selling your home? We’ve got you covered. Our real estate team is here to help you through the entire selling process, from preparing your home to getting the best possible price and terms.
We’ll guide you through every step of the way, so you can focus on what matters most.
Feel free to schedule a consultation wiht us by clicking here -> Home Page
If you’re interested in more if the housing market is going to crash and what the market looks like moving ahead.
We highly recommend you click Here