Attention buyers: the tide may finally be turning in your favor…well sort of. Read what experts have to say about the cooling market and what it means for you and your home-buying journey.
What does a Cooling Market Mean?
A cooling market doesn’t translate into lower home prices, it just means that prices are rising more slowly. However, because buyers are pulling back in response to rising mortgage rates on top of already high home prices, many sellers are accepting lower offers or renting their homes rather than selling.
How do we know the housing market is cooling?
- Slower home price growth
- Home prices are still at record highs, but now we’re seeing those prices increase at a much slower rate than last year (2021)
- Increasing Inventory
- If you recall just how cutthroat the housing market was in 2021 and early 2022, it wasn’t uncommon for a house to be on the market for less than 24 hours, or to find yourself in the middle of a bidding war for a home. Inventory was at an all-time low. As of Q4 2022, inventory was once again on the rise, with some cities reporting a growth of almost 20%
- More time on the market
- At the beginning of 2020, the average DOM (days on market) for the United States sat around 80 days, 2021 around 40 days, but in 2022 that figure is rising yet again.
Will Home Prices Drop in 2023?
National home price declines are uncommon, but experts are projecting fall in house prices by up to 7% by the end of 2023. This is a significant drop, the likes of which have not been seen since the 2006-2012 peak-to-trough decline. Although buyers may be feeling all warm and fuzzy about this price drop, that still leaves us at a price point similar to that of the beginning of 2022. Did you pay a fortune for your home in 2021-2022? Read this to find out why.
Where are Home Prices Falling the Fastest?
Top 10 cities where housing markets are cooling the fastest in 2022
- Seattle, Washington
- Las Vegas, Nevada
- San Jose, California
- San Diego, California
- Sacramento, California
- Denver, Colorado
- Phoenix, Arizona
- Oakland, California
- North Port, Florida
- Tacoma, Washington
Read more on the potential price drop here!