Experts weigh in on whether 2023 will be a year of economic turbulence.
Homebuyers are catching a break with the housing market cooling off after soaring COVID-induced heights. Experts think we’re in store for some serious price slashing, but by how much?
After a sizzling summer in 2022, the housing market has cooled off significantly. Soaring borrowing rates and overvalued markets could be signs that things may take an even more significant dip in 2023 – are we headed for a real estate crash?
It’s a roller coaster out there! Despite the economic forecast being less than ideal, not all markets are doomed to endure steep setbacks – some may experience minor losses and even slight gains. Some bankers are predicting as much as a 25%; loss of value for homes in these areas: San Jose, California; Austin, Texas; Phoenix, Arizona; and San Diego, California.
With interest rates on the upswing, certain areas could face an increased risk of delinquencies.
It’s a roller coaster out there! Despite the economic forecast being less than ideal, not all markets are doomed to endure steep setbacks – some may experience minor losses and even slight gains. Goldman Sachs researchers predict that interest rates are likely to remain stubbornly high in 2023, prompting them to bump up their forecast for 30-year fixed mortgage rates. While the national housing market should be largely insulated from this rise due it being “small enough as to avoid broad mortgage credit stress,” certain areas of the Southwest and Pacific coast will take a harder hit with peak-to-trough declines potentially reaching 25%. Given these outlooks, folks living there need to plan accordingly.
The Rest of the Country
Goldman Sachs researchers have good news for many US markets – with a soft landing of the economy and fixed mortgage rates falling to 6.15 percent by 2024, cities in Northeast, Southeast, and Midwest regions could see prices rising below their usual trend. While Chicago and New York may experience slight dips (1.8% & 0.3%, respectively), Baltimore is predicted to increase slightly at .5%, while Miami should enjoy an even more significant boost of .8%. It looks like it’s time we celebrate!