February 2023 Real Estate Market Update

Today’s market is rapidly changing. Things that, in a normal market, might take months are occurring in days. Even the big banks are drastically revising their forecasts. On January 10^th, Goldman Sachs predicted a 6% loss in home values. On January 24^th, they came back and said 2.6%. Overall, when we average the expert forecasts on home values for 2023, they will likely remain flat.

In addition, interest rates are trending downward - where the average mortgage rate peaked around the first half of November. In 90 days, we've seen almost a full percentage point drop, which is bringing buyers back to the market. If a home is priced right in this market, it's going to sell quickly.

The biggest issue for the spring market is going to be inventory – we are seeing over 100,000 less new listings than in previous years.

As we all know, the headlines do more to terrify than clarify. So, let’s take a look at one of the biggest factually correct headlines, and put it into perspective.

FORECLOSURES INCREASED 115%!!! True. However, it is important to look at where today’s foreclosure activity falls over time. Looking at foreclosure filings since 2005, disregarding the pandemic years, we are still far below historical foreclosure numbers. This is a very different landscape from the housing crash. Now we have more qualified buyers and forbearance options.