Demand is expected to damper across California next year—with the California Association of Realtors anticipating a 7.2 percent decline in sales. The 2022 figure is 19.2 percent lower compared with the pace of 444,520 homes sold in 2021.
“With the market shifting as home sales and prices are predicted to temper next year, buyers and sellers are adapting to the new realities of the market,” said CAR President Otto Catrina. “As sellers adjust their expectations, well-priced homes are still selling quickly. And for buyers: more homes for sale, less competition, and fewer homes selling above asking price, all point to a more favorable market environment for those who were outbid or sat out during the past two years when the market was fiercely competitive.”
CAR anticipates that the California median home price is forecast to retreat 8.8 percent to $758,600 in 2023, following a projected 5.7 percent increase to $831,460 in 2022 from $786,700 in 2021.
“As the housing market continues to cool, the U.S. economy will moderate further and is expected to slip into a mild recession in the first half of next year,” said CAR Vice President and Chief Economist Jordan Levine. “High inflationary pressures will keep mortgage rates elevated, which will reduce buying power and depress housing affordability for prospective buyers in the upcoming year. As such, housing demand and home prices will soften throughout 2023.”