Three of 2023’s biggest Real Estate Myths Debunked
We’ve all seen the headlines… the housing market is about to come crashing down around us and we’re all headed for imminent financial ruin. Right?… RIGHT?
Not quite.
Read on for answers to three of Real Estate’s most burning questions of 2023:
1: “IS The housing market is about to crash?”
Despite the doom and gloom dominating the media, the data makes it clear that house prices are actually not in a free fall and it’s not time to hunker down and hide from the imminent crash.
In fact home values are actually increasing in most markets, and here in New Jersey they have been on a steady uptick since Feb, making it one of the country’s hottest markets right now.
May 2023 saw median NJ home prices hit $477,600 which was up almost $25k from April and up 5% YoY from May 2022.
In fact, NJ boasted an eighth place ranking across all America’s Eastern Coastline states for sale price jumps over the past two years with an approx 18% increase since April 2021.
Any Floridian homeowners in the room with us? You’ll be pleased to hear that y’all are in first place with a two year increase amounting to a dizzying jump of over 35%!
2: “Will there be a flood of foreclosures in 2023?”
There’s been a lot of concern around this so the fear is understandable but whilst the market is indeed seeing an expected rise in foreclosure filings, there is really no need to panic.
The data is clear and the picture it paints is not one of inevitable crisis or catastrophe. In fact it shows a landscape which is significantly stronger than the one we saw prior to the housing crash in 2008.
Why? Four reasons:
1. Homeowners holding near-record equity
2. Lower risk mortgage lending
3. Lower unemployment numbers.
4. Scarce inventory
All of these factors combine to create a market which is more resilient & better safeguarded against a foreclosure crisis.
3: “Will a recession crash the Housing market?”
There’s no denying that everyone is feeling the squeeze right now so it’s no wonder that economic concerns are front of mind when it comes to buying/selling decisions.
But remember, a recession does not automatically mean a housing crisis.
In fact historical data shows that in four of the last six recessions, home value actually appreciated and in all instances, mortgage rates decreased, boosting affordability for potential buyers.
Key Takeaway:
Important caveat here: no-one (including us) can precisely predict the future of house prices and there is no way of knowing for sure what the full economical impact of a recession will be, but we believe there is good reason to feel optimistic about the ongoing health of the housing market in 2023.
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