SAN DIEGO — A new report from Realtor.com suggests if you're looking to buy or sell a home in 2023, the market will be just as challenging, if not more than it was this year.
"It's gonna be a tough market," said realtor.com chief economist Danielle Hale.
The site releases projections for the next 12 months every year around this time.
Regarding mortgage rates, they foresee them going up before dropping slightly toward the end of the year.
According to the real estate site Mortgage News Daily, the average rate on a 30-year fixed-rate mortgage is 6.33 percent.
"We expect mortgage rates to rise above seven percent as they were in October. We don't think the Fed is done tightening," said Hale.
Because of that, Hale says home price growth will slow down.
In other words, home prices will increase, but not as drastically as we've seen over the past couple of years.
"If you compare the 2023 average sales price against the 2022 median sales price for the year, we're going to see home prices up about 3.6 percent in the San Diego market, much slower than what we've seen recently, but maybe perhaps a surprise to some folks that we don't expect the average price to go down. That doesn't mean we might not see some year-to-year declines in the second half of the year, but on a whole, prices are still going to be higher in 2023 compared to 2022," said Hale.
So, while it may be more expensive to purchase and or finance a home, Hale says one of the benefits is it will create less competition for buyers since fewer will be able to compete.
That means less pressure to act and possibly more negotiating power.
"That's going to mean more homes available for sale, and it will probably sit a little longer on the market, giving you more time to decide so you can be confident in the decision you're making in the housing market," said Hale.
Other 2023 predictions include the following:
- -Nationwide, home sales will decline 14.1% year-over-year to 4.53 million, the lowest level since 2012.
- -In San Diego, they could drop by more than 27 percent, one of the highest drops in the country behind Oxnard, San Jose and Sarasota, Florida.
Hale said there's no market crash on the horizon. "It's more important than ever as a buyer to focus on affordability and making sure you don't get in over your head to get the home you want."
Another 2023 prediction-a lot of people will still need to rent, meaning rents will continue to increase.
Hale said predicted income growth and new construction both here and nationwide will eventually help balance that out.
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