Unlike the frenzied "seller's market" of the previous few years, in which record-low mortgage rates and low inventory led to fast-paced bidding wars and skyrocketing prices, the market is now moving towards greater stability. Current conditions are characterized by slower home sales and moderating or declining prices. In short, several factors have shifted in favor of buyers, who won't have to deal with as much competition and will have more leverage to negotiate upon finding their ideal home.

According to the National Association of Realtors, 2023 will bring "long-lost normalcy" back to the market. NAR predicts that median home prices will show very little growth in the first, third, and fourth quarters, and may even decline slightly in the second quarter (as shown in the chart below):

Mark Fleming, Chief Economist at First American, also predicts that once the housing market has adjusted to the new normal of higher mortgage rates, strong demographic-driven demand coupled with an overall long-run shortage of supply, will drive up prices once again. This means that the current "buyer's market" could be relatively short-lived, as conditions are projected to shift back in favor of sellers after the market adjusts.

According to David Stevens, former Assistant Secretary of Housing:

“So be advised...this may be the one and only window for the next few years to get into a buyer’s market. And remember...as the Federal Reserve data shows...home prices only go up and always recover from recessions no matter how mild or severe. Long term homeowners should view this market...right now...as a unique buying opportunity.”

Bottom Line

If you're looking to purchase a home this year, this may be the perfect time to begin your search. To ensure you're making informed decisions, it's a good idea to work with a trusted real estate advisor.

Reach out today to tell us about your desired property, or click the buttons below to view MLS listings for Greater Sacramento and the Bay Area.