If you’re thinking about buying a home in the next year and you’re reading the national headlines and you’re looking at the interest rates, you might be tempted to try to time the market and get it just right for your home-buying decision. If you’re thinking about it logically, it makes sense. You look at a super hot housing market for the last few years, home prices have skyrocketing, and you’re thinking, Hey, what goes up? Must come down, right? Prices are going to fall right? However, if you’re asking the questions, will home prices drop in 2023? If you look nationally, experts agree, they’re still gonna go up next year, and in fact, in Cincinnati, Ohio, they’re even expected to outpace the national growth rate. Coming up. I’m gonna dive into the numbers and the data to check if will home prices drop in 2023 so that you can make a wise decision if you’re looking to buy a home in now.
My name is Eric Sztanyo from Keller Williams Realty and TeamSztanyo.com, where we are helping you find your home and strengthen your family. It’s a victory Monday when I’m doing this. The Bengals have won five straight. Joe Burrow finally beat the Cleveland Browns. I know this probably won’t get out until a few more weeks, and so maybe we didn’t slug it out against the bills, but right now we’re looking good. We’re coming for the Ravens in the North, ready to make another playoff run. So for you Bengals fans out there Who day! Man, it’s really nice to have Joe Burrow and Ja’Marr Chase on our team.
Home Prices Prediction Data for 2023
All right, let’s jump into the data and the numbers. If you’re thinking about buying a house in the Cincinnati area in 2023, we’re gonna hop over to the Cincinnati Business Courier again and check out this article with the headline, “Cincinnati home prices are expected to rise, sales increase in 2023, Realtor.com predicts”
“Home prices in Cincinnati are expected to increase next year. According to a new projection from realtor.com.“
“The website forecasts, Cincinnati home prices will climb 6.1% in the new year. That’s slightly above the rest of the country. As nationwide prices are expected to grow 5.4% in 2023.“
And I know you’re thinking, whoa, hold up, Eric, hold up. I thought with interest rates going up and all this inflation, eventually, this market’s gonna turn around and prices are supposed to go down, right? Well, if you’ve watched this channel for a while, you know, we’ve been kind of saying the same thing over and over again, which is, while yes, the market is slowing down, it’s not to the point yet where it’s a buyer’s market. It’s not to the point where we’re gonna see sales prices go down next year.
So the rest of the country is expected to grow 5.4%, and Cincinnati is slightly above that with sales prices expected to go up 6.1% in 2023. We’ve talked about this before, but if you wait to buy a house next year and these predictions come true? A $300,000 house is gonna cost 18 grand more, right? A $400,000 house, 24 grand, more $500,000 house is gonna cost you $30,000 more one year from today than if you were to buy it right now.
And I know you’re asking, Eric, isn’t the market slowing down? Somewhat, yes. Look at this next stat here.
“Home sales, however, are expected to decline 14.1% year over year nationally to 4.53 million, the lowest total since 2012. “
Now, that’s not home prices, that’s home units. So they are predicting that the amount of units sold in 2023 is gonna be down 14% next year.
“Cincinnati is expected to buck that trend, though, with 3% sales growth next year. “
So now this is not the home price, this is the amount of units being sold according to realtor.com. So that’s a pretty big swing. Nationally, expected to go down 14%, but in Cincinnati still expected to go up 3%. That’s a 17% swing. That’s well above what they’re expecting across the country, and a number of things are contributing to that. I’m sure there’s still the relative affordability here in Cincinnati compared to a lot of other Sunbelt cities. We’ve talked about that in other videos, the amenities that are here, and of course, Joe Burrow’s gonna lead us to his Super Bowl in early 2023. All right, maybe cool it down a little bit.
“But despite that projected growth, local real estate agents are predicting 2023 might be the year the region’s red hot housing market finally cools down, thanks in part to low inventory and increasing interest rates.“
So there are agents still saying here, yeah, it’ll probably cool down a bit because these interest rates eventually are knocking buyers out of what they can’t afford.
All right, continuing on..
“Daniel Hale, realtor dot com’s, chief Economist said on the whole 2023 will be a slower-paced housing market, but it should set the stage for home sales to return to a sustainable pace over the next few years. “
And if you were a real estate agent in the last few years, you know that it was pretty unsustainable. If you were selling a house, you’d get lots of showings, you’d get tons of offers if you were buying a house, it was just kind of a nightmare. You had to compete against all these other buyers. You had to make offers over list price, you had to waive inspections, you had to do all kinds of crazy things. It was, it was unsustainable.
Hail says..
“With mortgage rates continuing to climb as the Fed navigates the economy to a soft-ish landing, higher costs will lead to fewer closings. But that doesn’t mean home buying will stop entirely in 2023. Hail said in a news release. “Americans who are determined to make a move will find that stain up to date on the market. Flexibility, creativity, and a healthy dose of patients will go a long way toward success in the year ahead. ““
So the chief economist for realtor.com is saying that if you want to have success in the year ahead, if you’re looking to buy or sell a house, you need to stay up to date on the market. And now it’s probably the right time to go ahead and smash that like button and subscribe to the channel…No, but in all seriousness, I mean, we are here to bring you guys market data, and when you use Team Sztanyo as your agent, that’s part of what we’re trying to do. Because we’re tapped into this market on a daily basis, we can feel what’s happening, whether you’re looking to buy or sell, so that you can make the best choice for your family.
Moving on in this article…
“Although home sales are expected to slow overall in 2023, Realtor.com’s forecast points to the possibility of a second wind in buying activity in the second half of the year. With mortgage rate hikes projected to continue through the first quarter of the new year, the spring season will likely be less busy than in a typical year. Buyers and sellers adjusting around smaller budgets could provide space for demand to renew just as mortgage rates are expected to dip according to the projections.”
So what they’re saying is interest rates are gonna continue to climb until probably the first, maybe second quarter of next year, because rates will keep going up. That’s gonna cause that buyer demand to keep going low. So the spring, which is usually the hottest time of the market in Cincinnati, that’s usually May, June, July, those months, right there is when the prices really go up and you get the most buyer activity. This is saying there might be tampering down on that, but if rates dip in the second half of the year, you might see that demand climb at the end of, you know, q3, Q4 of 2023.
“Incomes are expected to grow 3.9% in 2023, but that’s not enough to offset higher mortgage rates at 7.4% and higher home prices at 5.4%, creating a trifecta for budget barriers, the release said, which could weigh especially heavy in first-time home buyers.”
Okay, so the good news, you’re getting a raise next year. Incomes are gonna go up about 4%. The bad news interest rates are climbing to 7.4%, and home prices are going up 5.4%. So if you’re looking to sit it out and wait and thinking, Hey, I need to wait for the home prices drop, these rates are too high! I get where you’re coming from.
Your buying power is less strong than it was when the rates were lower. However, home prices are gonna continue to go up. So one thing you need to consider with the rates going up is they could keep going up, right? 6%-7% is not that high historically. In fact, that’s about average. So they could climb if inflation keeps going, interest rates could go to 8%, 9%, or 10%. On the flip side, if you lock in a rate at 6% or 7%, wherever that is and rates go down, you could always refinance in the future. So timing the market can be really risky venture for you.
If you wanna buy a house, and this article ends with one more objection, which says, Hey, I’m just gonna sit it out. I’m not gonna buy a house, I’m gonna rent. The article says..
“High rents could also weigh on first-time home buyers. Rents are expected to increase 6.3% year over year, outpacing home prices according to the Realtor.com data.”
So if you’re thinking, Hey, I’m just gonna keep renting, the bad news is your rent rates are gonna go up even more than the housing prices are gonna go up.
Help in Finding a Home Just Right For Your Family
Look, guys, I get it, it’s challenging. It’s expensive. It can be confusing, it can be overwhelming, especially if you’re a first-time home buyer. You’re like, man, I just keep getting squeezed here. I can’t get a break. I understand all of that. But we’d like to help navigate you through all of these challenges. We’d like to see you putting your housing budget into something that’s building you equity over time, as opposed to be putting into rent that’s just going away month after month after month. So if you’re looking for an agent and a team who can help navigate through all the market madness, we’d love to be your real estate agent of choice in 2023. Reach out to us at Team Sztanyo (513) 813-6293. Thank you so much we’ll see you next time.