In the wake of a housing reset, experts adjusted their forecasts to follow a slower growth pattern throughout the remainder of 2022, but as prices reach unsustainable highs and inventory falls to a historic low, Goldman Sachs economists are now calling for “home price growth to stall completely” in 2023, the CalculatedRisk Newsletter reports. The most recent price outlook forecasts an average 0% growth in 2023, though large declines are still unlikely.
While some popular housing markets are already seeing unchanged price growth, cities like Seattle, San Francisco, and San Diego are seeing prices fall, which, according to Bill McBride, may become more common as the odds of a 5% to 10% national decline increase.
But there are also factors arguing for national price declines. First, prices appear significantly too high using real prices, and price-to-income and price-to-rent ratios. Also, the recent sharp year-over-year increase in monthly payments for the same house, will put downward pressure on house prices.
In some areas, prices are already declining. In the most recent Case-Shiller report, on a seasonally adjusted basis, prices declined in 7 of the 20 Case-Shiller cities: Seattle, San Francisco, San Diego, Portland, Los Angeles, Denver and Washington, DC.
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