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FairfaxReal EstateNational home sales to decline in 2023; Atlanta to be the hottest...

National home sales to decline in 2023; Atlanta to be the hottest market

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Lawrence Yun, the chief economist and senior vice president of research at the National Association of Realtors (NAR) forecasts that 4.78 million existing homes will be sold nationally, prices will remain stable, and Atlanta will be the top real estate market to watch in 2023 and beyond.

Yun unveiled the association’s forecast during NAR’s fourth annual year-end Real Estate Forecast Summit.

Yun predicts home sales will decline by 6.8 percent compared to 2022 (5.13 million) and the median home price will reach $385,800 – an increase of 0.3 percent from $384,500.

“Half of the country may experience small price gains, while the other half may see slight price declines,” Yun said. “However, markets in California may be the exception, with San Francisco, for example, likely to register price drops of 10 to 15 percent.”

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He predicts foreclosure rates will remain at historically low levels in 2023, comprising less than 1 percent of all mortgages, and believes the 30-year fixed mortgage rate to settle at 5.7% as the Federal Reserve slows the pace of rate hikes to control inflation.

NAR identified 10 real estate markets that it expects to outperform other metro areas in 2023. In order, the markets are as follows: Atlanta, Raleigh (N.C.), Dallas-Fort Worth, Fayetteville (Ark.), Greenville (S.C.), Charleston (S.C.), Huntsville (Ala.), Jacksonville, San Antonio and Knoxville.

“The demand for housing continues to outpace supply,” Yun said. “The economic conditions in place in the top 10 U.S. markets, all of which are located in the South, provide the support for home prices to climb by at least 5 percent in 2023.”

NAR selected the top 10 real estate markets to watch in 2023 based on how they compared to the national average on the following economic indicators: 1) better housing affordability; 2) greater numbers of renters who can afford to buy a median-priced home; 3) stronger job growth; 4) faster growth of information industry jobs; 5) higher shares of the information industry in the respective local GDPs; 6) migration gains; 7) shares of workers teleworking; 8) faster population growth; 9) faster growth of active housing inventory; and 10) smaller housing shortages.

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