While 2022 hasn’t exactly turned out to be a picnic for the real estate industry, many industry forecasts are predicting 2023 to be a challenging year. Looking into his crystal ball, National Association of Realtors chief economist and senior vice president of research, Lawrence Yun, made his predictions for 2023 at NAR’s fourth-annual year-end Real Estate Forecast summit.
Yun is no Punxatawney Phil and has some very specific call-outs for the road ahead. He says that 4.78 million existing homes will be sold, prices will remain stable, and Atlanta will be the top real estate market to watch through 2023 and into the future.
According to NAR’s report, runners-up to the crown jewel of the Peach State include Raleigh, North Carolina, and our own Dallas-Fort Worth-Arlington MSA.
“The demand for housing continues to outpace supply,” Yun said. “The economic conditions in place in the top 10 U.S. markets, all of which are located in the South, provide the support for home prices to climb by at least 5 percent in 2023.”
The Dallas-Fort Worth region beat the Fayetteville-Springdale-Rogers MSAs of Arkansas and Missouri; Greenville-Anderson-Mauldin, South Carolina; Charleston-North Charleston, South Carolina; Huntsville, Alabama; Jacksonville, Florida; San Antonio-New Braunfels, Texas; and Knoxville, Tennessee.
“Dallas-Fort Worth has experienced a growing influx of tech workers. This is another emerging tech in the U.S., with many new start-ups moving in this area,” the report stated. “Not only is housing more affordable than nationally, but this area provides more options to buyers.”
Nationally, Yun sees home sales falling by 6.8 percent compared to 2022 (5.13 million) and the median home price will reach $385,800 — an increase of just 0.3 percent from this year ($384,500).
“Half of the country may experience small price gains, while the other half may see slight price declines,” Yun said. “However, markets in California may be the exception, with San Francisco, for example, likely to register price drops of 10–15 percent.”
Yun expects rent prices to rise 5 percent in 2023, following a 7 percent increase in 2022. He predicts foreclosure rates will remain at historically low levels in 2023, comprising less than 1 percent of all mortgages.
After eclipsing 7 percent in late 2022, the NAR economist expects the 30-year fixed mortgage rate to settle at 5.7 percent as the Fed slows the pace of rate hikes to control inflation. Yun noted this is lower than the pre-pandemic historical rate of 8 percent.
Top 10 Real Estate Markets to Watch in 2023 And Into The Future
NAR identified 10 real estate markets that it expects to outperform other metro areas in 2023. In order, the markets are as follows:
- Atlanta-Sandy Springs-Marietta, Georgia
- Raleigh, North Carolina
- Dallas-Fort Worth-Arlington, Texas
- Fayetteville-Springdale-Rogers, Arkansas-Missouri
- Greenville-Anderson-Mauldin, South Carolina
- Charleston-North Charleston, South Carolina
- Huntsville, Alabama
- Jacksonville, Florida
- San Antonio-New Braunfels, Texas
- Knoxville, Tennessee
NAR selected the top 10 real estate markets to watch in 2023 based on how they compared to the national average on the following economic indicators: 1) better housing affordability; 2) greater numbers of renters who can afford to buy a median-priced home; 3) stronger job growth; 4) faster growth of information industry jobs; 5) higher shares of the information industry in the respective local GDPs; 6) migration gains; 7) shares of workers teleworking; 8) faster population growth; 9) faster growth of active housing inventory; and 10) smaller housing shortages.
According to the numbers, Dallas-Fort Worth has a Housing Affordability Index of 95.1. Because the HAI is less than 100, that means the typical family in the region earns less than the qualifying income to purchase a median-priced home. According to NAR’s numbers, 22.9 percent of renters in the Dallas-Fort Worth-Arlington MSA qualify to purchase a typical home with a 7 percent mortgage interest rate. Altogether, the region’s population has increased by 1.3 percent from January 2022 to September of the same year while there has been a 110.5 percent increase in active listings from October 2021 to 2022.
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Source: https://candysdirt.com/2022/12/19/nar-names-dallas-fort-worth-one-of-the-top-real-estate-markets-to-watch-in-2023/