The housing market will NOT collapse in 2023 – but a correction is imminent for demand, inventory and buyers, while sellers are getting less money for their homes, an expert warns
- The real estate market will not collapse in 2023, the real estate agent in Las Vegas emphasizes
- But expert Craig Tann says sellers may need to be “realistic” with house prices
- He adds that a “correction” is imminent for demand, inventory, buyers and sellers
- Mortgage Applications Soared Nearly 28% In One Week
The housing market will not collapse this year, but sellers may need to put more “realistic” price tags on their homes, a property expert has warned.
Las Vegas realtor Craig Tann claimed that after two years of record-low interest rates and skyrocketing home prices, a “correction” is underway in the real estate industry.
It comes after a tumultuous few months for homeowners, during which mortgage rates rose to a high of 7.2 percent in late October before falling back to just over 6 percent now.
Tann, who owns agency Huntington & Ellis, believes the market is primed for a necessary realignment between demand, inventory, buyers and sellers.
Las Vegas real estate agent Craig Tann says the housing market will not collapse in 2023, but a correction for demand, inventory, buyers and sellers is imminent
A graph showing the change in US 30-year mortgage rates between September 2022 and January 2023
He told : “Confusion reigns in the property industry.
“For those who have never experienced these conditions before, this creates uncertainty and many have raised questions about the future of the market; does it cool down or crash?
“We see a balance of these extremes.
‘The market lacks the necessary indicators for a crash and is instead showing signs of a correction.’
However, he added that homeowners may have greater difficulty selling their homes.
“Sellers who want to attract buyers’ interest may need to list their homes at a more realistic and attractive price than the previous market,” Tann said.
The housing market was set on fire during the pandemic as the increase in people working from home led families to prioritize larger properties with more outdoor space.
Pictured: A few people are paraded around a property (file photo)
Savings accrued during lockdown and government support programs also boosted household income and helped more people up the property ladder.
It quickly became a sellers’ market, while buyers faced stiff competition and staggering prices.
But a post-pandemic global economic slump has had a knock-on effect, sending interest rates higher — though they’re slowly beginning to fall again.
Pictured: meeting on finances (archive photo). The average contract rate for 30-year fixed-rate mortgages with matching loan balances ($726,200 or less) fell from 6.42% to 6.23%, with points falling from 0.73 (including the setup fee) to 0.67 for loans Payment decreased by 20%
The average interest rate on a 30-year fixed-rate mortgage with an equivalent loan balance ($726,000 or less) is currently 6.23 percent.
Last year rates were typically below 4 percent.
But there was good news for homeowners today, as the volume of mortgage applications surged 28 percent last week, according to the Mortgage Bankers Association (MBA) seasonally adjusted index.
According to Tann, this is a natural consequence of the beginning price decline.
He said: “As prices have shifted to become significantly more attractive than last year, buyers could re-enter the market to take advantage of prices we haven’t seen in years.”
However, the market does not see an increase in inventories.
According to Redfin, a real estate agent, the number of active listings is about 21% higher than a year ago.
This is largely because homes are now staying on the market longer and selling a lot less.
New listings of homes for sale are down 22% year-on-year.
It comes after other experts told some states would be fairer than others as the market rebalances.
Redfin chief economist Daryl Fairweather said housing prices could fall in cities like Austin, Phoenix and Las Vegas, but homes in the Northeast and Chicago could appreciate.