If all you read are the headlines, you might be convinced that the 2023 real estate market is over the hump and all is well. But is it really?
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It is a classic Real Estate Realities today where we sit down and look at the numbers and ground truth to compare it to the headlines …. that seem so optimistic about the direction the 2023 real estate market is going.
Home Prices Are Back!
As I have been reporting, homes are once again selling for over asking price nearly across the board. However, given the month we are in, when demand for homes is seasonally at its peak, this should be the high point this year for that number.
However, while sellers are getting over asking price right now, they are also getting less than they were a year ago when looked at from the averages.
So no, home prices are not ‘back’. Not only that, but from here we should expect declines in average sales prices and how much homes sell for compared to their list price. In fact, it would not surprise me to see homes selling for under asking again within a month or two.
Time To Completely Panic
I would not go so far as to suggest that we start to panic. However, the 2023 real estate market is not in recovery. We continue to face inflation and a looming recession. We do see lots of folks who own homes with lots of equity, but we also have lots of folks who bought homes at the peak with very little equity. If home values drop just by10-20%, a huge number of home owners will be very solidly underwater. Being underwater tends to lead to some very bad things. Bad things that could kick off a further decline that could be hard to stop!