Will housing sales price decline in 2023? Prediction: Yes
It is widely expected that existing home prices will go down in 2023 in what essentially will become a ‘buyer’s market’. Robert Dietz, Senior Vice President and Chief Economist of the National Association of Homebuilders. He is forecasting home price declines through the end of 2023, with prices down 10% in typical markets from peak. In fact, there is already evidence of house prices decreasing with the National Home Price Index having fallen for two consecutive months, starting in July, for the first time since March 2011.
However, most East Coast markets, including New England are likely to see minimal depreciation of no more than 5%.
For some, the decline in house prices is not only certain to happen, but will also be noticeable. Baron Christopher Hanson, Real Estate Consultant at Coldwell Banker Realty, claims that “the insane residential prices that peaked during COVID will now come crashing down to reality again. Average and aging homes worth a few hundred thousand dollars pre-COVID that somehow sold like hotcakes for nearly a million dollars during COVID will be no more.”
However, such markets like Boston and New York City are unlikely to see any major correction due to the limited number of turnkey homes for sale, aiding in price stability.
As well as this, some predict the drop in house prices on a national level won’t be extreme. Rayan Rafay, CFO and COO of Fraction says, “In 2023, we expect a flat to modest decline in home prices at a national level. This will primarily be driven by a lack of affordability thanks to previous price appreciation coupled with the rapid increase of interest rates.