It’s time to reflect on what the next year will bring for us, with very little time left. One of the interesting questions is the price of houses. What will happen to them? Will prices rise or fall?
Two real estate gurus, Jim Wood and Dejan Eskic, shared their expert opinions as they discussed what the housing market could look like in 2023. Their arguments made it clear that the experts did not agree on everything.
Both specialists only agreed that the housing market is at the stage of price changes, as in recent years there has been increased demand in connection with the global pandemic. However, experts differ on how real estate prices will develop in the next year.
Last week, both researchers had an open debate at Ivory Homes’ annual private meeting. The event was attended by many experts from Utah’s housing industry.
The aim of the opponents was to clarify what is currently happening with the market and what changes can be expected. Mostly, the experts shared their opinion that the market is quite unstable now. Mortgage interest rates fluctuated by up to seven percent on some days, despite the hot phase in the sale of houses. Due to this change, the demand dropped significantly, putting an end to the increased demand.
None of the experts say we can see a similar picture as 15 years ago when the market collapsed. Then the country’s economy did not see the best of times. The two experts agreed that home demand will increase as the country grows, leading to a housing shortage. We won’t see citizens lose their foreclosures because Utah’s job market is strong.
Thanks to the stable situation on the labor market, residents are actively buying houses, both for their families and as an investment. When furnishing their homes, residents also invest in good furniture, such as a sofa, bedroom set, home theater seating, etc. Such factors indicate that the housing market will not face a crash.
However, everyone assumes that there will still be some adjustments. It depends largely on the Federal Reserve’s rapid rate hike as it continues its fight against inflation. This can cause some problems for home builders. However, it will also help ensure that residents who have not been able to afford their own home due to high prices will soon be able to purchase a property.
The only question that remains is whether real estate prices will fall significantly. Experts have different opinions on this topic.
Dejan Eskic gives a slightly pessimistic forecast for the housing market. He says prices will fall an average of 9 percent in the market next year after demand picked up this spring. This decline is already noticeable and will become clear to all industry experts towards the end of winter and the beginning of spring. However, much depends on what changes in interest rates are about to occur.
Jim Wood tends to be more optimistic. He states that there will be minor market changes that will lead to a rapid stabilization of the situation. We’ll be able to see it in a few quarters from early 2023.
His main argument is that house prices in the state rarely fall sharply according to historical charts. There is always some slowdown in growth at the end of the cycle, which is normal. In the last decades of the 20th century, real estate prices first fell and then stabilized.
However, the second specialist notes that prices fell from 2007 to 2009, and after that they rose sharply. The expert also says some slowdown in job growth is possible next year. Jim Wood notes that thanks to the economy we will not see a major recession and prices will have some support.
Both experts point out that the housing market will certainly be vulnerable in the first quarters. However, they hope that the situation will reach a stable level towards the end of the year.
Due to heated controversy, the housing pundits decided to place a bet in front of the spectators present. The specialists agreed that they would meet again at the end of next year to see which of them was right.
Both specialists have thick beards. The one whose arguments come closest to the truth undertakes to shave off his beard. This made the audience laugh, who listened enthusiastically to the arguments of the two opponents. Many experts hope that a situation like that of the Great Recession will not be repeated. Various fluctuations and adjustments are possible. However, everyone hopes that the situation will stabilize in the end. Construction companies will continue to operate without fear of bankruptcy, and residents will be able to buy housing for their families.