Did home prices actually fall in 2023 as experts predicted at the end of 2022?

No. While experts predicted substantial home price declines at the end of 2022, the reality proved different—home prices were far more resilient than expected. All seven major forecasting organizations revised their predictions upward, with 2023 year-end forecasts showing either flat or positive price growth instead of the declines they originally predicted.

Why are U.S. home prices so resistant to falling?

According to First American's Deputy Chief Economist Odeta Kushi, long-term fixed-rate mortgages protect homeowners from payment shock and act as an inflation hedge, since primary household expenses don't change when inflation rises. This structural feature makes home prices in the U.S. inherently "downside sticky."

Should I worry if headlines say home prices are falling in the fall and winter?

Not necessarily. Home price growth naturally slows seasonally at the end of each year as market activity decreases, but deceleration of appreciation is not the same as home prices depreciating. Misleading media coverage often confuses slower growth with actual price declines, so it's important to distinguish between the two.

What was the 'unicorn' years period mentioned in the market report?

The 'unicorn' years refer to the period of sky-high home price appreciation that preceded 2023. After those years of exceptional growth, there was a slight correction, but prices did not crash as some feared.

Expert Home Price Forecasts Revised Up for 2023

By Anne-Britt OstlundSeptember 5, 20233 min read

Selling Your Home

Toward the end of last year, there were a number of headlines saying home prices were going to fall substantially in 2023. That led to a lot of fear and questions about whether there was going to be a repeat of the housing crash that happened back in 2008. But the headlines got it wrong.

While there was a slight home price correction after the sky-high price appreciation during the ‘unicorn’ years, nationally, home prices didn’t come crashing down. If anything, prices were a lot more resilient than many people expected.

Let’s take a look at some of the expert forecasts from late last year stacked against their most recent forecasts to show that even the experts recognize they were overly pessimistic.

Expert Home Price Forecasts: Then and Now

This visual shows the 2023 home price forecasts from seven organizations. It provides the original 2023 forecasts (released in late 2022) for what would happen to home prices by the end of this year and their most recently revised 2023 forecasts (see chart below):

As the red in the middle column shows, in all instances, their original forecast called for home prices to fall. But, if you look at the right column, you’ll see all experts have updated their projections for the year-end to show they expect prices to either be flat or have positive growth. That’s a significant change from the original negative numbers.

There are a number of reasons why home prices are so resilient to falling. As Odeta Kushi, Deputy Chief Economist at First American, says:

“One thing is for sure, having long-term, fixed-rate debt in the U.S. protects homeowners from payment shock, acts as an inflation hedge – your primary household expense doesn’t change when inflation rises – and is a reason why home prices in the U.S. are downside sticky.”

A Look Forward To Get Ahead of the Next Headlines

For home prices, you’re going to continue to see misleading media coverage in the months ahead. That’s because there’s seasonality to home price appreciation and they’re going to misunderstand that. Here’s what you need to know to get ahead of the next round of negative headlines.

As activity in the housing market slows at the end of this year (as it typically does each year), home price growth will slow too. But, this doesn’t mean prices are falling – it’s just that they’re not increasing as quickly as they were when the market was in the peak homebuying season.

Basically, deceleration of appreciation is not the same thing as home prices depreciating.

Bottom Line

In conclusion, when it comes to your Telluride real estate endeavors, trust matters. At Mountain Rose Realty, our dedicated team, led by experienced professionals like Anne-Britt, is committed to providing you with accurate, up-to-date information in the world of Telluride homes for sale.

Don't let sensational headlines misguide your decisions. While the media may have predicted a decline in home prices, the reality in Telluride, CO, often paints a different picture. To make informed choices for your property investments, connect with our team of experts at Mountain Rose Realty. We specialize in Telluride real estate and have a deep understanding of the local market dynamics.

With our assistance, you can navigate the Telluride homes for sale market confidently, armed with reliable data and insights. We're here to help you find the perfect home that suits your needs and budget. Your dream home in Telluride is closer than you think.

Ready to take the next step in your Telluride real estate journey? Contact Mountain Rose Realty today and let us guide you towards your ideal homes for sale in Telluride, CO. Don't let rumors and headlines dictate your decisions; trust in our expertise and local knowledge. Your Telluride real estate aspirations are in safe hands with us.

Frequently Asked Questions

Did home prices actually fall in 2023 as experts predicted at the end of 2022?: No. While experts predicted substantial home price declines at the end of 2022, the reality proved different—home prices were far more resilient than expected. All seven major forecasting organizations revised their predictions upward, with 2023 year-end forecasts showing either flat or positive price growth instead of the declines they originally predicted.
Why are U.S. home prices so resistant to falling?: According to First American's Deputy Chief Economist Odeta Kushi, long-term fixed-rate mortgages protect homeowners from payment shock and act as an inflation hedge, since primary household expenses don't change when inflation rises. This structural feature makes home prices in the U.S. inherently "downside sticky."
Should I worry if headlines say home prices are falling in the fall and winter?: Not necessarily. Home price growth naturally slows seasonally at the end of each year as market activity decreases, but deceleration of appreciation is not the same as home prices depreciating. Misleading media coverage often confuses slower growth with actual price declines, so it's important to distinguish between the two.
What was the 'unicorn' years period mentioned in the market report?: The 'unicorn' years refer to the period of sky-high home price appreciation that preceded 2023. After those years of exceptional growth, there was a slight correction, but prices did not crash as some feared.