Contributing Content Writer: Horace Chavez, Broker Associate DRE#01259508
Coronado Shores Company
Spring 2023 Real Estate Market Outlook
The spring housing market is stronger than some think. The predicted decline in home prices has not happened as some economists predicted. In a typical spring market, inventory would have climbed 5%-10% by mid-April. This year, inventory has declined by 17% compared to 2022.
We have been at or near record-low inventory levels for a few years now. According to Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), “That’s limiting just how low prices will go. High priced regions such as California are most vulnerable to a downturn in prices.”
Headlines everywhere were saying how prices would end up crashing. A lot of people expected prices to crash this year due to low buyer demand. So far, we have seen prices remain relatively flat. The lack of available inventory is putting upward pressure on prices. Bankrate puts it like this: “The ongoing lack of inventory explains why many buyers have little choice but to bid up prices. And it also indicates that the supply-and-demand equation simply won’t allow a price crash in the near future. There are many more buyers out there than there are homes for sale.
Potential would be sellers are sitting on plenty of equity right now. Many homeowners are locked into low mortgage rates. With this kind of cushion, sellers are under no pressure to move. These conditions also keep homeowners out of a distressed sale or foreclosure. So, the numbers for properties in default should remain pretty low.
Housing economists point to five key reasons why the housing market is not about to crash.
- Low Inventories: The 0.8 to 2.9 average months supply of available inventory keeps us in a seller’s market.
- Builders cannot build quick enough to meet demand.
- Demographic Trends are Creating New Buyers: Millennials are a huge group in their prime buying years and Hispanic buyers are another growing demographic group.
- Lending Standards Remain Strict: Tough verifiable program requirements and borrowers coming in with overwhelmingly good credit. The typical credit score for borrowers today is 776.
- Foreclosure Activity is Muted: There are no foreclosures flooding the housing market. Lots of homeowners are sitting on a comfortable cushion of equity.
If you are thinking of moving this year or planning to buy, partner with one of our trusted real estate advisors.
Horace Chavez, Broker Associate
Coronado Shores Company
The Shores Group, Real Estate Advisors
(Sources: Altos Research, Keeping Current Matters, Bankrate, National Association of Realtors, San Diego Association of Realtors)
To view Coronado homes for sale, for rent or for property management services, please visit Coronado Shores Co.