With the end of the year approaching, 2023 housing market predictions abound. A big question for the coming year is whether or not home prices will finally fall. Redfin predicts that a post-pandemic sales slump will cause housing prices to sink. Realtor.com, on the other hand, forecasts that prices will remain high in the coming year. Forbes observes that economists are mixed and continue to maintain a watchful eye. Plus, industry experts weigh in on appraisal modernization and the importance of valuation quality in 2023. Read on for end-of-year appraisal news and insights.
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Redfin’s 2023 housing predictions: A post-pandemic sales slump will push housing prices down
Home sales are expected to “sink to their lowest level in more than a decade in 2023 as high mortgage rates keep housing costs up and prevent people from moving,” according to Redfin’s housing market predictions for the coming year. They also say that “high homeowner equity and a resilient job market will stave off a wave of foreclosures.” Additionally, they foresee that the Midwest and Northeast will hold up relatively well as the overall U.S. housing market cools, and that falling rents will cause Gen Zers and young Millennials to put off buying their first homes.
Realtor.com says housing prices aren’t coming down in 2023
Alternatively, Realtor.com’s Housing Forecast 2023 predicts that homebuying costs will remain high in 2023 amid higher mortgage rates and tighter budgets due to inflation. They foresee a moderation in home price growth, but say that it will not be enough to tip the market in favor of buyers. “The 2023 housing market could become a ‘nobody’s-market,’ not friendly to buyers nor to sellers,” they warn. Although affordability will remain a challenge, they foresee a silver lining for homebuyers in terms of rising inventory and more homes to choose from in 2023.
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Forbes asks, will home prices (finally) fall in 2023?
Conflicting market predictions (as seen in the two headlines above) are also reflected in Forbes’s housing market predictions for 2023. Forbes points out that “many economists are mixed about whether home prices will continue their slow decline through 2023—or crash.” Although there are signs that a market correction is underway, they say that experts “maintain a watchful eye on the economy,” which is “still being pulled in all directions” as we approach the end of 2022.
Appraisal modernization: what to expect in 2023
This DS News piece features a Q&A with Phillip King, Vice President, Principal Product Manager, EXOS Valuations at EXOS Technologies (ServiceLink). King provides insights into what’s happening in the appraisal modernization space now, as well as what we can expect to see in 2023. Topics include Fannie Mae and Freddie Mac’s embrace of appraisal modernization, the industry’s progress toward incorporating technology-forward appraisal solutions, and how lenders can best position themselves to adopt modernized processes in the coming year.
Heightened focus on appraisal quality in 2023
In his Working RE Magazine article, “Appraisal Quality: 6 Tips for Success in 2023,” Ken Folven, Senior Director for Quality Assurance at Clear Capital, states: “While appraisal quality has always been essential, as market trends shift again at the end of 2022, we are witnessing a rise in revision requests being sent back to appraisers from lenders, and customers show a heightened focus on appraisal quality.” Due diligence efforts around valuation quality are becoming more common as mortgage application volume decreases, he explains.