It is time to think about what the next year will bring for us, until which there is very little time left. One of the questions of interest is the price of houses. What will happen to them? Will prices go up or down?
Two housing gurus, Jim Wood and Dejan Eskic shared their expert opinions as they debated what the housing market could look like in 2023. Expressing their arguments, it became clear that the experts do not agree with each other on everything.
The only thing that both specialists agreed on was that the housing market is at the stage of price changes since in recent years there has been increased demand associated with the global pandemic. However, experts hold different opinions about how housing prices will change next year.
Last week, both researchers held an open debate as part of the annual private meeting of Ivory Homes. The event was attended by many Utah housing industry experts.
The purpose of the opponents was to clarify what is happening with the market now and what changes should be expected. Mostly, the experts shared their opinion that the market is rather unstable now. Despite hot home sales periods, mortgage rates fluctuated as much as seven percent on some days. Due to this change, the demand dropped significantly, which put an end to the increased demand.
None of the experts say that we will be able to see a picture similar to what happened 15 years ago when the market crashed. Then the country’s economy experienced not the best of its times. The two experts agreed that demand for home purchases will increase as the state grows, resulting in a housing shortage. We won’t see citizens lose their foreclosures because Utah’s job market is strong.
Thanks to the stable situation in the labor market, residents are actively buying houses, both for their families and as investments. When furnishing their homes, residents also invest in good furniture, like a sectional sofa, bedroom set, home theater seating, etc. Such factors suggest that the housing market will not face a crash.
However, everyone assumes that some adjustments will still occur. It largely depends on the rapid increase in rates by the Federal Reserve, which continues its fight against inflation. This can cause some problems for home-building companies. However, it will also help ensure that residents who previously could not afford to buy a home due to high prices will soon be able to purchase a property.
The only question remains whether real estate prices will fall significantly. Experts have different opinions on this issue.
Dejan Eskic makes a slightly pessimistic prognosis for the housing market. He says that next year the market will see prices fall by an average of nine percent, after increased demand this spring. Already, this drop is beginning to become noticeable, and towards the end of winter and the beginning of spring, it will become clear to all industry experts. However, much depends on what changes will occur with interest rates shortly.
Jim Wood tends to be more optimistic. He states that there will be minor changes in the market, which will lead to a rapid stabilization of the situation. We will be able to see it in a few quarters from the beginning of 2023.
His main argument is that according to historical charts, house prices in the state rarely go down much. As the cycle ends, there is always some slowdown in growth, which is normal. In the last decades of the 20th century, property prices first fell and then stabilized.
However, the second specialist notes that from 2007 to 2009 prices fell, after which they increased sharply. The expert also says that some slowdown in job growth is possible next year. Jim Wood notes that thanks to the economy, we will not face a major recession and prices will receive some support.
Both experts note that the housing market will surely be vulnerable for the first few quarters. However, they hope that towards the end of the year the situation will reach a stable level.
Due to serious controversy, the housing experts decided to make a bet in front of the spectators who were present at the event. The specialists agreed that at the end of next year they would meet again to see which of them would be right.
Both specialists have thick beards. The one whose arguments are closest to the truth undertakes to shave off his beard. This made the audience laugh, who enthusiastically listened to the arguments of both opponents. Numerous experts hope that a situation like the one that occurred during the Great Recession will not happen again. Various fluctuations and adjustments are possible. However, everyone hopes that in the end, the situation will stabilize. Construction companies will continue to operate without fear of going bankrupt, and residents will be able to purchase housing for their families.