2023 Market Predictions: Survey of Top Execs & Economists

Here's a great article talking with the latest predictions on the 2023 real estate market from more 11 top executives and economists of leading real estate firms... here a few takeaways:

Mortgage Rates: About three-quarters of the respondents expect the average 30-year fixed mortgage rate to stay below 7% in June 2023. By December, every respondent believes rates will be at or below 7%.

Home Values: Experts expect home values to drop by a median 5% during the year.

Volume of Sales: Nearly all the experts believe existing-home sales will fall in 2023 compared to 2022, but about one-third believe they will decrease by 9% or less.  (Even with this we'll see more annual sales than most than 2012-2018).

Guidance for the Future:

"When buying, buy for the long haul. Yes, interest rates are up. But so are rents. Yes, home prices are expected to be soft; so are stocks. A "fast" track to build wealth is not as clear as it was when rates were at their lowest and home price appreciation stunningly aggressive. And so that makes home buying into what it was long considered to be: a path to slow and steady wealth building, a way to pay yourself the landlord's take, and to run your own house/kingdom as you choose". —  Skylar Olsen, Chief Economist at Zillow

"Rates are expected to move lower for the year, and home price growth is expected to cool, both of which will help affordability challenges. But inventory remains tight, which will put a floor on how far home prices can fall. However, some previously "hot" markets will see more drastic price declines than others, and we have started to see signs of that in the Q3 2022 home price data." —  Mike Fratantoni, Chief Economist at the Mortgage Bankers Association

In the current market environment, rather than markets that outperform, it may be better to think about stable markets. The good news is that it’s unlikely we will see a repeat of the blockbuster price appreciation witnessed in some markets, especially in the South and West, in 2021 and early 2022. Many cities in these regions benefited from an influx of new residents who ditched the big cities and embraced remote work. Some are now seeing home prices fall as the market softens. With higher mortgage rates, affordability will continue to drive home-buying decisions.  Cities, especially in the lower-cost areas of the country, including many in the Midwest, are likely to see fewer wild swings in home prices, making the homeowning experience more stable and not as exhilarating for sellers or as scary for buyers. —  Paul Bishop, Vice President, Research and Economist at T3 Sixty

Big coastal markets will rebound quickest as return-to-office gets into full swing AND because those markets corrected first (they boom early and bust early). —  Eoin Matthews, Chief Business Officer and Co-founder at Point

Keep in mind, as much as our local market has boomed in recent times, we didn't see the 'COVID influx' most economists are discussing here with the exception of folks moving from in the city to rural areas in Puget Sound. So, we'll generally be more insulated than most markets and represent the 'Big coastal' market mentioned above.