Amy Jewett Sampson

CoreLogic’s Home Price Index showed that home prices nationwide fell by 0.4% from November to December but they were 6.9% higher when compared to December of 2021. This annual appreciation reading declined from 8.6% in November but is still solid. CoreLogic forecasts that home prices will drop 0.2% in January but rise 3% in the year going forward.

What’s the bottom line? CoreLogic’s Chief Economist Selma Hepp said that while home prices in December “continued to fall from November, the rate of decline was lower than that seen in the summer and still adds up to only a 3% cumulative drop in prices since last spring’s peak.” This is a far cry from a housing crash of 20% that some in the media have been predicting.

And while CoreLogic has reported slightly negative readings month to month, they still forecast 3% appreciation nationwide over the next year, which can be meaningful for wealth creation.

In addition, Zillow and Pulsenomics released their Home Price Expectations Survey for the fourth quarter of last year. Survey participants included 117 of the top economists in the country and they were asked about their expectations for home price appreciation over the next five years.

Results showed that respondents’ average expected appreciation over the next five years is 23.3% cumulatively. To quantify this, if someone bought a $500,000 home and we saw 23% appreciation over the next five years, they would gain $115,000 in appreciation alone. This data shows there is great opportunity ahead in the housing market, despite the negativity you may hear in the media.

Source

The following insights from a recent Forbes article highlights expert predictions for the New Year.

“2023 will bring lots of variability in how housing markets adjust,” Bright MLS Chief Economist Lisa Sturtevant said. “There will be a lot of resetting expectations for both buyers and sellers.”

According to Forbes, Sturtevant predicted “variations from market to market, with the greatest risk for price declines likely to occur in pandemic-era boomtowns—communities that saw some of the largest increases over the last two years. In places where buyers bid up prices, they will have to reset—and in some places, they could see prices fall significantly from their peak,” she said.

“Regardless, in almost every market, we believe prices will still remain above 2019 levels. So even if prices do come down, we should still be ahead of where we were prior to the pandemic. Bright MLS data shows 40% of sellers have adjusted their home price downward or offered concessions. This period of acceptance will take some time,” she continued.

“Sellers have to process all of this, and that is underway now. It’ll take a little time—probably into the first quarter of next year—to fully digest it.”

The Great Reset VLOG