Source: Appraisal Buzz — 

The U.S. real estate market is at near-unprecedented pricing, but that may not be the case for long. Recent data has experts projecting it will fall in the next year, which would lead to major changes for buyers, sellers, and professionals.

There are several things anyone involved in the market needs to be aware of as we reach a point of buyer prosperity or financial crisis.

Experts Predict Prices to Fall 5% by the End of Next Year

Most financial institutions predict market prices will fall by around 5% by the end of 2023. Wells Fargo predicts the decrease will be over 5%, and analyst Ivy Zelman expects prices will drop by 4% in 2023 and another 5% in 2024. Moody’s Analytics predicts a decrease of 5%-10%.

Capital Economics is a bit more pessimistic, predicting at least an 8% decrease over the next year.

As mortgage rates begin to fall, owners will start listing their homes as they purchase new properties, creating a greater balance between supply and demand.

Prices Could Fall Nearly 20%

Some experts think a more drastic change will occur over the next year, with prices falling nearly 20%.

Online real estate giant Zillow believes that by February 2023, prices will drop almost 18% from the same time in 2022. Pantheon Macroeconomics predicts that the drop will reach over 20% by the middle of 2023.

Prices will still be higher than at the beginning of 2020, representing just how drastic pricing has become over the past couple of years. The correction could burst the housing bubble and begin a recession if prices drop at this rate, which may change the course of the market.

More Houses May Come on the Market at Lower Prices

Some property owners took advantage of the increased market value over the past few years, getting a high listing price. However, this also limited the number of homes on the market.