Source: USA Today —
After a sudden slowdown in many housing markets this year, will markets that are “slow and steady” shine in 2023?
Midsize markets, which saw lower price increases and less of an affordability crunch than others, are poised to see the strongest combined growth in home sales and listing prices in the coming year, according to a report from Realtor.com.
With mortgage rates almost doubling since the beginning of the year and home prices continuing to inch up due to low inventory, affordability remains a big concern for buyers.
“Because these midsize markets didn’t really surge to new degrees during the pandemic, they are still relatively affordable,” Danielle Hale, chief economist for Realtor.com, told USA TODAY. “Nearly all of them have prices below the U.S median home price.”
Housing market predictions for 2023
Topping the list are Hartford-West Hartford, Connecticut, followed by El Paso, Texas; Louisville, Kentucky; Worcester, Massachusetts; Buffalo-Cheektowaga, New York; Augusta, Georgia; Grand Rapids-City of Wyoming, Michigan; Columbia, South Carolina; Chattanooga, Tennessee; and Toledo, Ohio.
“These are the markets that have been relatively slow and steady, and that slow and steadiness is going to help keep the real estate markets relatively active in 2023 in these areas,” Hale said.
Home sales across the top 10 markets are expected to grow by 5.2% year over year in 2023, whereas national home sales are projected to experience a decline in sales (-14.1%). Average home prices in these top 10 markets are expected to increase 7.3% compared with 5.4% nationally.
In the top 10 markets, about 23% of housing inventory is affordable at the median income level, compared to just 17% of affordable homes nationally.
Many of these areas flew under the radar in the pandemic frenzy and are now well-positioned to bubble up with solid job prospects without the big-city price tag, Hale said.
“As many households keep a close watch on their spending, we expect these top housing markets to be in relatively high demand,” Hale said. “We’ve seen lower price increases, more general affordability and more use of government-backed mortgage products for veterans, first-time and minority buyers in these top markets, providing opportunities for all home buyers to stretch their homebuying dollars.”
The only metro area on the list with a median home price above U.S. median of $415,750 is Worcester, at $447,000.