4.78 million existing homes will be sold, prices will remain stable and Atlanta will be the top market to watch in 2023 and beyond. All this according to forecasts by the National Association of Realtors. NAR’s Lawrence Yun, the National Association of Realtors chief economist and senior vice president of research, unveiled the predictions at NAR’s annual year-end Real Estate Forecast Summit last month.
Among the predictions were that home sales will decline by 6.8% compared to last year (5.13 million) and the median home price will reach $385,800 compared to 2022’s $384,500. That is just an increase of 0.3%.
“Half of the country may experience small price gains, while the other half may see slight price declines,” Yun said. “However, markets in California may be the exception, with San Francisco, for example, likely to register price drops of 10–15%.
After rising to 7% late last year, Yun expects the 30-year fixed mortgage rate to come down a bit to 5.7% as the Federal Reserve tries to get a control on inflation. Foreclosure rates will remain historically low in 2023, according to Yun. Yun predicts less than 1% of mortgages will default.
Along with pricing predictions, NAR also identified the 10 markets to expect to outperform in 2023. Topping the list is the Atlanta, Georgia metro area. While Charlotte didn’t make the top 10, Raleigh, North Carolina comes in at number two. Rounding out the list is Dallas-Fort Worth-Arlington, Texas; Fayetteville-Springdale-Rogers, Arkansas-Missouri; Greenville-Anderson-Mauldin, South Carolina; Charleston-North Charleston, South Carolina; Huntsville, Alabama; Jacksonville, Florida; San Antonio-New Braunfels, Texas and Knoxville, Tennessee
“The demand for housing continues to outpace supply,” Yun said. “The economic conditions in place in the top 10 U.S. markets, all of which are located in the South, provide the support for home prices to climb by at least 5% in 2023.”
The Top 10 real estate markets to watch in 2023 was selected by NAR based on how they compared to the national average by using some of these economic indicators: housing affordability, number of renters who can afford to buy homes at the median price, job growth, population growth, active housing inventory and housing shortages.
How does Charlotte’s numbers compare?
Comparing the Charlotte-Concord-Gastonia region to number one Atlanta and number 10 Knoxville, based on the Housing Affordability Index, Charlotte received 89.6 points compared to 100.7 and 97.2 for Atlanta and Knoxville, respectively.
23.3% of renters in the Charlotte region can afford to buy a median-priced home (at 7% mortgage rates), while 21.3% renters can afford to buy in Atlanta and 24.1% in Knoxville. And when taking a look at the numbers from NAR’s Housing Shortage Tracker (Oct. 2022) meaning areas where the housing supply meets better housing demand for buyers to have more options,
Atlanta ranks at 5.6; Knoxville at 4.3 and Charlotte 3.7. This measure computes how many new permits are issued for every new job.