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These 10 cities are most likely to weather a housing crisis.
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After home prices hit record highs last year, high mortgage rates have slowed down the housing market considerably. According to Redfin, home sales will fall to the lowest level since 2011. Redfin predicts that there will be 4.3 million homes sold in 2023, a 16% decline from 2022 and a 30% drop from 2021. Home prices will also fall, posting the first year-over-year decline in a decade. But not all housing markets will see a decline, the Redfin report also lists the markets that will likely hold up the best in 2023.
Most stable housing markets in 2023
Cities in the Midwest and certain East Coast metros are expected to be the most stable. The prices in these markets didn’t go up as much during the housing market frenzy post-COVID. According to Redfin’s data, demand and competition in these markets are similar to the beginning of 2022.
Housing markets set for the biggest declines
The markets that will most likely see the sharpest decreases in housing prices are the cities with the biggest increases in the past couple of years. Cities such as Austin, Boise, and Phoenix were pandemic migration hotspots and there is a lot of room for prices to drop. During the housing market frenzy post-COVID, home prices went up the most on the West Coast and East Coast. These areas were prime destinations during the initial phase of the pandemic.
In Malibu, California, home prices surged by 82% and bidding wars in Los Angeles hit a record high at 40.5% from the first quarter of 2021 to 2022. The East Coast also saw record gains, with the average home price of the Hamptons in New York increasing by 25% and the number of homes available falling by 24%, hitting a record low.
Purchasing a home is probably the most expensive purchase most people will ever make in their lives. In addition to understanding the total expenses of homeownership, knowing which markets are the most stable can be helpful before taking the plunge.
Make sure you take into account insurance, property taxes, and maintenance fees before you pull the trigger on buying a home. For home buyers looking to enter the real estate market, buying a home should be based on your personal financial situation. Do your research to find one in an area suited for you. While in the short term, prices will be impacted by interest rates and possible recessions, buying the right house may be a great investment over the long haul.
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