Economist Predictions on the Next 12 Months for the Real Estate Market
People are questioning – will the price of houses mitigate by 2023. The answer is twisted, as many forecasts contradict predictions of 2023 real estate. However, these predictions are similar in some ways, such as the market will experience fewer buyers as demand drops, prices will drop, but the borrowing rate will increase. As the rate increases, the economy will experience a shortage of availability, pushing many buyers to the sidelines. As a result, the prices may drop drastically, like in 2008. However, there are still predictions that the housing market will continue to overshoot despite the post-pandemic.
Regardless, many predictions show that in the next 12 months, the real estate business will experience a drop in home values due to lesser growth in the remaining months of 2022. The prediction further states that more than 552 markets will experience this drop over the next few months. The prediction is happening as over two-thirds of the country’s major housing markets experience a drop in home values during the summer because of an increase in mortgages. The shocking rise of mortgages continues to affect the market and the profit from spring sales. In this blog, we’ll discuss some of the major predictions of the real estate market in the next 12 months.
More listings are getting price cuts
A prediction from a real estate site known as Refine in May shows that many home sellers have dropped their home prices – one in every five homes –. The price drop has been higher than ever since the housing recession of October 2019. The market is showing some faint signs of rebalancing, and the price cut of many listings is creeping up. This is also a sign that sellers are getting ambitious in selling their houses within these remaining months. Nonetheless, inventory price continues to hike though they cannot be compared to the prices during the pre-pandemic era. This prediction shows that in the next 12 months, the real estate market may experience significant price cuts.
Prepare for inventory changes
The estate market may be facing a rebalancing soon. Many buyers are on the sidelines because prices in the market are increasing the demand for inventory. As for this, a prediction by the Finance of America Mortgage office says the prices may be affected by seasonality – spring and summer. These times are prime-buying windows as families look for big homes or relocate to new places for school. The shift will increase the demand for inventory in the market.
On the other hand, buyers looking to construct a home may find it difficult. During this period, there will be prolonged inflation and hike in prices, resulting in high prices for construction materials. As a result, the period will make building a home expensive, further complicating the real estate market.
Related: How to Determine Home Value
Buyer demand has softened
Marketwatch shows us that home prices have decreased continuously for six months starting in April due to mortgages rising. Furthermore, the search for a new home on Google dropped by 13% compared to last year. As the market struggles to stand, buyers, have softened their demand for homes and are seeking affordability. The action affects buyers and sellers as they wait to see how the issue will end. The period is volatile and uncertain and a wait-and-see moment.
Regardless, the market is still strong in many markets across the country and if you need to sell or buy, there are markets that support a balanced influx. For more information on Peoria real estate or East Peoria homes and the current market, contact us today.