Source: MorningStar —
Doug Duncan of Fannie Mae predicts how housing market perform in 2023, and reveals why he believes prices will fall this year
The real-estate sector is in a quandary.
The housing market was a wild rollercoaster ride that ended with a big fat splat last year, with mortgage rates doubling and demand plummeting.
Home sellers aren’t keen on listing their homes, given that they’ve recently secured an ultra-low mortgage rate. Home buyers, as a result, are struggling to find good options as the number of homes for sale remains low.
So where will the supply come from, to meet buyers’ demand? And what happens if a recession hits? Will home prices fall?
MarketWatch spoke with Doug Duncan, senior vice president and chief economist at Fannie Mae (FNMA), in a video interview.
Duncan’s team, which is the economic and strategic research group at Fannie Mae, recently published its economic and housing forecast.
MarketWatch: You changed your forecast for housing. Now you expect home prices to fall 6.7% in the next two years, which is more than you previously estimated. What was the reason for that? And what are the signs?
Duncan: You can look and see where [houses] were withdrawn from availability and re-listed at a lower price. That gives you an idea of whether price declines are taking place in that market.
Totally disagree. People listed their homes at ridiculously high prices, of course they have to come down. There is a shortage of homes and that drives prices up. Mortgage rates before Covid were much higher. You are misleading home buyers to think we will have a housing crisis. Tell the truth and stop scaring people!
Agreed, Stop attempting to scare buyers and sellers. I see a slower appreciating perhaps as much as 4.2% or better. Especially in 55 an older communities where 95% of buyers are all cash.
Totally agree Roxanne Ryan. After the onslaught of ridiculousness of last year (I had buyer’s bidding 150k over and losing), I coached my current client to list his house, before the holidays, here in the Bay Area at a price that would sell. He wanted to try his higher price during the holiday season which I allowed him to do but after modest interest we repriced it. A new year and after a modest price reduction, the first 2 open houses were packed with buyers and an offer immediately followed. I have colleagues in the San Diego area who, as of today, are currently stating that the San Diego market, where they have several listings, is now back to multiple offers and a buying frenzy. I’ve been in this market longer than most with a degree in Banking and Econ. and with no disrespect Doug but As Mr. Macy stated in Miracle on 34th St., where did you get graduate from, a correspondence school?