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Q4 2023 – Home Price Forecasts

2023 Market Forecast

 

Are you considering buying or selling a home? If so, you might be feeling a bit anxious due to the clickbait headlines about a potential crash in home prices. While no one has a crystal ball about what the future will bring, most experts who rely on data say that home prices are not in a downward spiral and are projected to finish the year on a strong note. 

Contrary to the rumors of a 5%, 10%, or even 20% drop in prices this year, that scenario has not materialized. The primary reason for this is the low supply of homes for sale. Despite high-interest rates, the number of prospective buyers outnumbers the available homes for sale, thereby preventing prices from declining.

According to most industry experts, home prices will experience positive growth in 2023. The graph below displays the latest year-end forecasts for 2023 from six different organizations: 

  2023 Year End home price forecast  As you can see, all but one organization projects a positive price trajectory nationally for this year. This broad agreement among experts signifies their optimism about home price appreciation. 

If you have concerns about the one red bar indicating an overall price decline for the year, consider this: the projection from the National Association of Realtors (NAR) suggests only a slight decrease. It is nothing close to the significant crash that some headlines have warned about. Furthermore, if you average all six forecasts together, the expectation is that home prices will experience approximately 3.3% positive growth for the year. 

If the opinions of these six organizations still don’t convince you that prices won’t plummet, there’s something else worth considering. One of the six forecasts featured in the graph is the Home Price Expectation Survey (HPES) from Pulsenomics. This survey combines insights gathered from over 100 economists, investment strategists, and housing market analysts. The HPES found that the average projection from these experts is also 3.3% price growth for the year.

By referring back to the graph above, you’ll observe that the blue average line also corresponds to the 3.3% projection in this graph. While individual forecasts may vary, both the HPES survey and the average of these forecasts convey the same point. Hence, it is evident that a 3.3% appreciation is a far cry from falling prices. 

Estimated Home Price Performance

Where are Home Prices Headed in the Future?

Another bit of good news is that in spite of the current turbulence, the market is returning to normal appreciation rates. Pulsenomics has just released its Home Price Expectation Survey (HPES) of future price performance. This forecast predicts lower-than-normal appreciation in 2024 with a gradual trend towards historic normal home price appreciation (see above). 

Bottom Line 

Alright, let’s wrap this up! Whether you’ve been spooked by headlines warning of a housing crash or you’re just on the fence about making a move, it’s crucial to lean on solid data rather than sensationalism. Across the board, the outlook for home prices in 2023 is far more optimistic than some would have you believe. According to the data, the recurring theme is growth, not a nosedive. So if you’re pondering buying or selling, take a breath, relax, and remember—despite the ups and downs of the market, property remains a solid investment.

Questions about the market in your area? Let’s talk.

James Bradley - Principal Broker

James Bradley

Principal Broker

Licensed in OR & WA

971-804-4618

Let’s Talk

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