Compared to this year, the housing market is expected to be drastically different on a nationwide scale in 2023.
Because of high mortgage rates, the U.S. market will likely be the slowest in more than a decade, since 2011, according to a prediction by researchers at the real estate website RedFin. However, the situation will likely be different in Chicago and surrounding communities.
Markets in "relatively affordable" Midwest and East Coast metro areas, such as Chicago, parts of Connecticut and upstate New York will "hold up relatively well" even as the market cools nationwide, analysts predicted.
In fact, suburban Lake County was ranked as the top U.S. market likely to hold up best in 2023, with Chicago right behind in second place. Elgin also made the top 10, coming in at sixth place.
If you were looking forward to a drop in prices, you may be questioning why these cities and Lake County likely won't follow the same course as most of the country. According to RedFin, the aforementioned areas, and the others listed in the top 10, tend to be "more stable than expensive coastal areas and didn't heat up as much during the pandemic homebuying frenzy."
For anyone looking to snag a great deal - and willing to move anywhere to get one - you might consider heading West. Prices are slated to fall the most in "pandemic migration hotspots," such as Austin, Texas, Boise, Idaho and Phoenix, Arizona. Those cities have experienced huge price increases over the last two years, and now, there's a significant amount of room for the prices to decline, according to Redfin.
Overall, 16% fewer existing homes will likely be sold in 2023, compared to this year, with many prospective buyers bowing out due to challenges of high mortgage rates, persistent inflation, a potential recession and "still-high" home prices, according to the prediction.
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Redfin predicts home sales will fall drastically throughout most of the country in 2023, with existing home sales likely declining 31% year over year in the first quarter followed by smaller declines in the second and third quarters. By the fourth quarter, existing home sales will be flat from the year prior, and then start recovering as rates fall from their peak, researchers stated.
The full list of the top 10 U.S. housing markets likely to hold up best in 2023 is below:
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- 1. Lake County, Illinois
- 2. Chicago, Illinois
- 3. Milwaukee, Wisconsin
- 4. Albany, New York
- 5. Baltimore, Maryland
- 6. Elgin, Illinois
- 7. Rochester, New York
- 8. Pittsburgh, Pennsylvania
- 9. New Haven, Connecticut
- 10. Hartford, Connecticut
