Home sales nationally appear to be heading for a slight decline in the immediate coming months, according to the chief economist with the National Association of Realtors.
Speaking at the group’s latest Residential Economic Issues and Trends Forum, Lawrence Yun said despite the sales drop-off heading into 2023, home prices are slated to increase by about 1% next year, with a much more robust 5% expected for 2024.
Yun added that “half of the country will see minor price gains, the other half of the country will see minor price declines” in 2023.
For realtors, this means simply enduring next year’s market conditions. “But after that everything should be in a better situation,” Yun remarked, looking at the probable state of the overall market in 2024.
In fact, the NAR is forecasting a decline of 7% in unit sales for next year, along with a 1% rise in the average price of a home. Those numbers improve to 10% in 2024 in unit sales, along with a 5% increase in the average price of a home.
Yun also predicted 2023 fluctuations in the commercial real estate market, noting that “nationwide, we are beginning to see some decline in commercial appraisal values.”
“Cap rates simply cannot match up with higher borrowing costs, especially among people who need to refinance their properties,” the economist continued.
Yun added that “offices are the most vulnerable to these prices decreases. We are seeing a rise in office vacancies in many cities, driven by a preference for remote work.”
By Garry Boulard
