2022 turned out to be a fairly volatile year for the real for real estate. After a euphoric start to the year which saw home prices make historic gains in some Bay Area markets, inflation and rising interest rates led to a sudden decrease in buyer activity. As a result, prices came down, and general economic uncertainty left some buyers and sellers waiting on the sidelines in hopes of brighter days ahead. Looking forward to 2023, can we expect more volatility? Or will inflation stabilize, allowing the Fed to pause, if not roll back, some of the rate hikes that led to mortgage rates more than doubling for the first time ever in a calendar year?
To that end, there is some reason to be optimistic. Inflation showed some signs of slowing down at the end of 2022, and most experts are projecting a moderate decrease in mortgage rates over the course of 2023 (see first chart). If these projections hold true, this should allow prices to stabilize as buyers become more confident in the market and are able to better plan for their purchase.
In the second chart, you’ll see an average of 7 major home price projections leaving us at essentially a net 0 for the year (0.1% gain). Nothing to write home about, but the epitome of stability. And after a year like 2022, some stability would be very much welcomed.
Looking to make a move in 2023? We are just starting to plan out our year, and we’d love for you to be a part of it. Click the link below to get the conversation started: