Monday Market Update: California 2023 Market Forecast
‘Tis the season when the 2023 housing market forecasts emerge… here is what industry experts are predicting for the Golden State.
As we countdown to the final quarter of 2022, the headwinds of 2023 are already upon us. The initial 2023 housing market forecasts are beginning to role in, and we wanted to share this one below from the California Association of Realtors (CAR)® just released last week. In short, existing single-family home sales are expected to decline by 7.2%, median home prices are estimated to lower 8.8% and mortgage rates are expected to however around 6.6%.
While it’s no surprise that home sales are anticipated to slow down as interest rates rise, most homeowners are more concerned about the potential drop of median home prices. First of all, the median is a middle point designed among the prices of all homes – meaning that some prices will increase, some prices will decrease and some will stay the same. In addition, variations will occur not only regionally across the state but in the various micro markets within each county.
Please also recall that the blogs we have covered in recent weeks reveal even in cities where home prices are dropping the most in the short-term, most if not all are holding gains in the long-term. The concern over a median home price decline is most relevant if you have owned your home less than two years and plan to sell in the next 12 months. However, market variations tend to be largely relative, so if the market you are purchasing in is also experiencing median price declines, the trend is less concerning.
The bottom line is that as interest rates rise, prices stabilize and affordability decreases – strategy is paramount in every real estate decision you make. While buyers will likely be impacted by reduced buying power, those who are still in a position to buy may face less market competition and greater terms negotiation.
Keep in mind that this release is an initial forecast and is subject to change as this year progresses and the new year begins. It is very common for industry associations to revise their annual forecasts based on changing market conditions, so we urge you to follow our blog as well as your preferred and reputable industry resources over time.
All my best,
Bobbi Decker
DRE#00607999
Broker Associate, Bobbi Decker & Associates
650.346.5352 cell
650.577.3127 efax
www.bobbidecker.com
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Bobbi Decker & Associates fully supports the principles of the Fair Housing Act and the Equal Opportunity Act. For more information, please visit: http://portal.hud.gov/
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