Housing Prices Will Probably Drop

If this occurs, is there anything you can do about it?

Photo by Mika Baumeister on Unsplash

Many people, when you tell them you think housing prices will continue to drop, will ask if you’ve looked at the supply of housing. Isn’t the supply low these days?

And they have a point — the National Association of Realtors data showed a little over 3 months’ worth of housing supply in October of 2022. According to traditional wisdom, the real estate market needs about 6 months of supply in order to achieve a balance between sellers and buyers.

The problem is that low supply does not matter if demand is even lower.

And unfortunately, there are several reasons that demand may stay lower than supply, even though supply is quite low in historical terms. And even though we’ve already seen housing prices drop in many markets over the last 3 months.

I predict housing prices will continue to drop in 2023. There are several reasons I think this will happen.

Photo by Markus Spiske on Unsplash

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