This article was posted on Thursday, Dec 01, 2022

Housing experts say they’re expecting the market to tip back into the buyers’ court by 2023, according to a new report. The housing market will shift in favor of home buyers by the end of 2023, according to 44% of 107 economists and housing experts polled by real estate company Zillow for its newly published “Home Price Expectations” Survey. And 12% of these experts believed that shift will happen sooner — that is, this year!

But yet, roughly 45% of experts surveyed by Zillow say buyers will have to wait and expect the market to shift in buyers’ favor in 2024, and beyond.

All survey respondents said to expect home-price deceleration in 2023. And you’re already seeing signs of price pressures manifesting: The median price of an existing home in the U.S. dropped to $389,500 in September, down from $403,800 the previous month, according to the National Association of Realtors.

Most of the housing experts surveyed noted that the markets most likely to see home prices decline over the next year include pandemic boomtowns like Boise, Austin, and Raleigh. If you recall, these cities saw a huge jump in sales amid the earliest days of the pandemic. The markets least likely to see home prices decline over the next year include Midwestern cities like Columbus, Indianapolis, and Minneapolis, the survey indicates. Only 36% of respondents expect home prices to decline in these areas over the next 12 months. Some markets in the south are also expected to see demand hold strong, including Atlanta, Nashville, and Charlotte.

Typical Homes Now Sell for Less Than Asking Price

The average American house sold for less than its list price for the first time in over 17 months during the four-week period ending August 28, as the housing market cool-down continues. Every month, since March of 2021, has seen an average sale-to-list ratio of over 100%, meaning that the average home sold for more than its final asking price. This comes as the share of listings with a price drop has increased.

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Despite the easing in home prices, demand from homebuyers is still chilled – (mortgage purchase applications and pending sales both saw large declines from a year ago) – thanks in large part to spikes in mortgage rates (which rose to 5.66%). Home sellers are also reluctant to step into the market: new listings and total inventory of homes for sale saw large declines as well.

Redfin Chief Economist Daryl Fairweather says “The post-Labor Day slowdown will likely be a little more intense this year than in previous years when the market was super tight. Expect homes to linger on the market, which may lead to another uptick in the share of sellers lowering their prices. Homebuyers’ budgets are increasingly stretched thin by rising rates and ongoing inflation, so sellers need to make their homes and their prices attractive to get buyers’ attention during the remainder of the year.”

72% of Recent Homebuyers Have Regrets About Their Purchases

As the housing market cools, feverish competition for homes in the past couple of years has left 72% of recent buyers having regrets about their home purchases, according to a recent survey from Clever Real Estate. The number-one reason for the buyer’s remorse: they spent too much money! The second most common regret was rushing the home-buying process, with 30% saying their purchase decision was rushed and 26% indicating they bought too quickly.

The online survey was conducted this summer and included about 1,000 individuals who bought a home in 2021 or 2022. It was commissioned by Anytime Estimate (which is owned by Clever Real Estate). As you fondly remember, the hot seller’s market in recent years prompted buyers to go above and beyond to seal the deals on their prospective homes — which contributed to regrets. To that point, 31% of buyers said they paid over the asking price. The median amount paid over the listing price was $65,000. Notably, tight competition led 36% of buyers to make an offer on a home without even seeing it in person first. Even so, the competition was fierce, with 80% of buyers saying they made more than one offer, with 41% making five offers or more! About one in three buyers said they searched for three months for their homes, while one in eight took six months or more.

Los Angeles County Settling Lawsuit Over Homeless Crisis 

[In October], Los Angeles County leaders announced a lawsuit settlement that commits millions of dollars to expand outreach and supportive services for homeless residents. This marks the potential end of two years of litigation over the crisis of people living on the streets.

The deal puts L.A. County, operator of the local public health system, in direct partnership with the city of Los Angeles, which has committed to sheltering thousands of homeless residents as part of its settlement in the lawsuit reached earlier this year. As you may recall, the suit was brought in 2020 by the LA Alliance for Human Rights, a coalition that includes businesses, residents, landlords, homeless people and others who allege that inaction by the city and county has created a dangerous environment.

Supervisor Holly Mitchell said the county will commit an estimated $236 million in new funding to address homelessness through 2027, with an emphasis on expanding street outreach teams to make sure people who need help get it. That’s on top of more than $530 million in homelessness funding created by a sales tax approved by voters in 2017. Mitchell said the new money will also go toward a “comprehensive suite of services” for eligible residents for 10,200 permanent housing units and 3,100 interim shelter beds that the city of LA has committed to build under its agreement. Services will include case management, medical and mental health support, benefits advocacy, family reunification, childcare and addiction treatment.

The county’s settlement requires the approval of U.S. District Judge David O. Carter, who is overseeing the case and will supervise the settlement’s implementation through 2027. Under the city’s settlement, announced in April and approved by the judge in June, Los Angeles will create shelter or housing for 60% of homeless people in the city who do not have a serious mental illness, substance abuse disorder or chronic physical illness. But my only question is this: If the city and county officials have continuously said over the past years that they are doing “everything possible” to address the homeless crisis, how can they now suddenly commit hundreds of millions of additional dollars to deal with the crisis? Where was the money before and why wasn’t it used? This hypocrisy is what I hate about local government.

After practicing law for 35 years (specializing in real estate litigation), Lloyd Segal assumed the leadership of the Los Angeles County Real Estate Investors Association in 2017 from the late Phyllis Rockower. Lloyd is an author, real estate investor, mentor, public speaker, and LANDLORD. He is the also the author of four real estate reference books, including “Stop Foreclosure in California” (Nolo Press), “Stop Foreclosure Now” (American Management Association), “Foreclosure Investing” (Regency Books), and “Flipping Houses” (Regency Books). The Los Angeles County Real Estate Investors Association is the oldest (1996) and largest investor group in California. In his role as President, Lloyd is busy expanding LAC-REIA’s events and programs for members and real estate investors. For more information, visit