Real Estate Market Predictions: Six experts on the outlook for real estate in 2023.

The converse - not owning a home without financial hardship resulting in late payments will again not end in a forced sale. Homeowners have very high levels of equity right now, which allows them to withstand potential price declines and prevents financial hardship from turning into a forced home sale, said Odeta Kushi, deputy chief economist at First American Financial Corp. "In fact, if it requires unemployed homeowners to settle delinquencies, given their financial reserves, forced sales are much more likely than foreclosures," she says. "While we can expect to see an increase in the number of''forced sales as the labor market slows and home prices decline from their peak, the result is likely to be a lackluster expansion of forced sales'.

The level of affordable housing will remain low.

The chronic shortage of real estate supply was a major driver of price appreciation during the pandemic real estate boom, and it will be a key pillar of prices in 2023, says real estate appraiser Jonathan Miller, who compiles the monthly Douglas Elliman Real Estate Report for New York City. "In previous downturns in the real estate market, supply has been overwhelming," Miller says. "Consumers were used to the low interest rates at which they refinanced or purchased homes during the boom. Excess supply is not''is a major factor in 2023 because, even with moderate supply growth, price declines should be minimal'." Redfin predicts about 4.3 million homes will be sold in 2023, fewer than in any year since 2011 and a 16 percent decline from the previous year.

Home prices decline

Home prices will decline in 2023, says Taylor Marr, deputy chief economist at Redfin. Marr expects the median U.S. home sale price to decline by about 4% in 2023. Even with a 4% year-over-year price decline, housing will be far less affordable in 2023 than it was before the real estate boom during the pandemic, he says. "Given projected prices for next year and mortgage rates, the monthly''the typical homebuyer's payment will be about 63% higher in 2023 than it was in 2019, just before the pandemic began.'" Home prices will decline the most in cities that experienced a boom during the pandemic, while markets in Midwest and the Northeast will fare better, Marr says. Prices are expected to decline the most in cities that experienced pandemic migration, such as Austin, Texas, Boise, Idaho, and Phoenix, as well as expensive cities on the West Coast. Meanwhile, housing markets in relatively affordable Midwest and East Coast cities, especially Chicago and parts of Connecticut and upstate New York, will be fairly resilient.

New Construction Forecast''housing

Single-family housing starts are set to drop on the calendar in 2022, the first such decline in 11 years, despite a persistent structural housing shortage in the U.S., according to a report from the National Association of Home Builders. The NAHB/Wells Fargo HMI homebuilder sentiment index has declined for 11 consecutive months, signaling a continued contraction in homebuilding in 2023. "Single-family homebuilding will ultimately lead the housing and overall economic recovery in 2024 as interest rates fall again on a sustained basis, attracting demand to the for-sale housing market," says Robert Dietz, chief economist for the National Association of Home Builders. Dietz also expects the volume''According to Mark Norman, vice dean of NYU's Schack Institute School of Professional Studies in Real Estate. "We've been living with the pandemic for almost three years now, but that's still not enough time to change the ownership, financing and regulatory systems for converting underutilized office