Leave a Message

Thank you for your message. We will be in touch with you shortly.

Is the Real Estate Market Slowing Down, or Is This a Housing Bubble?

Is the Real Estate Market Slowing Down, or Is This a Housing Bubble?

The talk of a housing bubble in the coming year seems to be at a fever pitch as rising mortgage rates continue to slow down an overheated real estate market. Over the past two years, home prices have appreciated at an unsustainable pace causing many to ask: are things just slowing down, or is a crash coming?

To answer this question, there are two things we want to understand. The first is the reality of the shift in today’s housing market. And the second is what experts are saying about home prices in the coming year.

The Reality of the Shift in Today’s Housing Market

The reality is we’re seeing an inflection point in housing supply and demand. According to realtor.com, active listings have increased more than 26% over last year, while showings from the latest ShowingTime Showing Index have decreased almost 17% from last year (see graph below). This is an inflection point for housing because, over the past two years, we’ve seen a massive amount of demand (showings) and not enough homes available for sale for the number of people that wanted to buy. That caused the market frenzy.

Today, supply and demand look very different, and the market is slowing down from the pace we’ve seen. This offers proof of the sudden slowdown so many people are feeling.

Is the Real Estate Market Slowing Down, or Is This a Housing Bubble? | MyKCM

What Experts Are Saying About Home Prices in the Coming Year

Right now, most experts are forecasting home price appreciation in 2023, but at a much slower pace than the last two years. The average of the six forecasters below is for national home prices to appreciate by 2.5% in the coming year. Only one of the six is calling for home price depreciation.

Is the Real Estate Market Slowing Down, or Is This a Housing Bubble? | MyKCM

When we look at the shift taking place along with what experts are saying, we can conclude the national real estate market is slowing down but is not a bubble getting ready to burst. This isn’t to say that a few overheated markets won’t experience home price depreciation, but there isn’t a case to be made for a national housing bubble.

Bottom Line

The real estate market is slowing down, and that’s causing many to fear we’re in a housing bubble. What we’ve experienced in the housing market over the past two years were historic levels of demand and constrained supply. That led to homes going up in value at a record pace. While some overheated markets may experience price depreciation in the short term, according to experts, the national real estate market will appreciate in the coming year.

 

The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Keeping Current Matters, Inc. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.


Recent Blog Posts

Single Women Are Embracing Homeownership

Homeownership is life-changing no matter who you are. Let's connect today to talk about your goals in the housing market.

What’s the Latest with Mortgage Rates?

Recent headlines may leave you wondering what’s next for mortgage rates.

What Every Homebuyer Should Know About Closing Costs

Before making the decision to buy a home, it's important to plan for all the costs you’ll be responsible for.

3 Helpful Tips for First-Time Homebuyers [INFOGRAPHIC]

If you’re worried about affordability today or the limited number of homes for sale, these tips can help.

What Are Experts Saying About the Spring Housing Market?

Here's what the professionals are saying about what’s in store for this season.

Does It Make Sense To Buy a Home Right Now?

Thinking about buying a home? If so, you're probably wondering: should I buy now or wait?

Homeowners Today Have Options To Avoid Foreclosure

While headlines may be calling attention to a slight uptick in foreclosure filings recently, the bigger picture is that we’re still well below the number we’d see in a… Read more

4 Tips To Make Your Strongest Offer on a Home

If so, you should know today’s market is competitive in many areas because the number of homes for sale is still low.

The Latest Trends in Housing [INFOGRAPHIC]

With the number of new listings going up and average days on market going down, buyers may have more options, but will still want to move fast.

Work With Us

We're fortunate to be able to do what we want to do every day, and what we want to do is help clients live a better, more secure life. Whether you're buying a home, looking to sell or relocate, or are an investor, we can help you. No agents will work harder for you, because to us, going to bat for you, isn't work. That's just what you do when you're a team.

Follow Me On Instagram