Just a few months ago, homebuyers were competing in knock-down, drag-out bidding wars for modest homes that were selling for six figures over their asking prices. Now, sellers are rapidly dropping prices and doing whatever they can to attract even a single interested buyer.
Call it the Great Real Estate Reversal.
As mortgage interest rates have soared, making purchasing a home significantly more expensive, buyers largely have disappeared from the market. It’s not that they don’t want to close on a home; it’s that they can’t afford to do so anymore. Home sales are down, prices have fallen, and properties for sale are beginning to pile up.
However, there are some real estate markets bucking the grimness that has overtaken the housing market in recent months. The Realtor.com® economic research team identified these metropolitan areas where sales and prices are anticipated to continue rising next year. These are the top housing markets of 2023.
“They are very affordable markets. These are areas where your housing dollars really stretch further,” says Realtor.com Chief Economist Danielle Hale. “These places did not overheat during the [COVID-19] pandemic housing frenzy over the last two years. That puts them on more solid footing. Prices and sales still have more room to grow.”
To come up with the list, Realtor.com looked at housing and economic data in the 100 largest metropolitan areas. (Metros include the main city and surrounding suburbs and smaller urban areas.)
These midsized metropolitan areas generally offer lower-priced homes that locals can still afford. All but one had median prices well under the national median of $417,000 in November because they didn’t experience the huge price spikes seen elsewhere during the pandemic. And buyers are still active in these areas, so sales are still happening.
They also tend to have solid economies and are located near big employment centers. They aren’t the latest tech hot spots and are far from the flashier, larger cities on the coasts. Several of the top 10 had military installations, ensuring a steady stream of people moving in and out of the area.
“These are the real estate markets that are going to be more active” next year, says Hale. “If you’re a seller, it means you can expect buyers. If you’re a buyer, you can expect competition. And if you’re a homeowner, you can expect prices to rise, which gives you more equity in your home.”
The Realtor.com 2023 forecast anticipates that home prices will rise 5.4% nationally, a departure from the big run-ups experienced during the pandemic. The number of sales, which was high over the past few years, is expected to drop 14.1% next year.
“They are really outliers, especially when it comes to sales,” Hale says of the top markets.
Read full article. [Source: www.realtor.com]
