- Existing home sales are projected to fall to 4.1 million in 2023, their lowest point in a decade.
- Buyers and sellers alike complain of a market that only gets worse the longer they wait.
The housing market has virtually grinded to halt in 2023.
Existing-home sales are expected to close at their lowest levels since 2011, when the country was still clawing back from the Great Recession and the burst of the housing bubble.
"We're in for a fairly prolonged freeze," Chen Zhao, economics research lead at real-estate firm Redfin, told the Wall Street Journal.
Redfin projects sales will end up at 4.1 million when the year is out. If sales drop below 4 million — a possibility — it will be the slowest year on record and first to break that threshold since 1995, according to the National Association of Realtors.
The slowed-down market could have impacts across the economy, forcing some potential buyers to continue renting and influencing some potential sellers to stay put.
In a recent note, Bank of America compared today's market to the slog of the early 1980s. Home prices surged over 16% in 1979, similar to the 21% surge in 2021. Existing home sales then also fell 54% during the 1980s wave, according to the bank, compared to the projected drop from 2021 to 2023 of 32%.
The bank remained hopeful for a turnaround but warned of more turbulence for buyers and sellers brave enough to face the market.
"Hang tight, it may be a bumpy ride," it wrote in the note.
Buyers keep waiting, but nothing seems to improve
Rising mortgage rates, skyrocketing home prices, and a lack of inventory continue to plague the aspiring homebuyer. But playing the waiting game seems to only make things worse.
In Richmond, Virginia, 31-year-old software developer Lawrence Talej is kicking himself for not acting sooner. In 2019, he had the opportunity to purchase a $315,000 home, but a $40,000 repair bill post-inspection scared him off. Now, the median home price in his ZIP code has risen by $100,000. As of January 2023, he was still living with his parents.
New Jersey resident Yonatan Hochstein told the Journal that he and his wife have been on the hunt for a year. He blames the lack of inventory, but said while they've been patient for more housing stock, conditions for buying continue to get harder.
"We've found the longer we're waiting, interest rates have kept going up and home prices have kept increasing, so it's getting harder and harder," he said.
Sellers are also forced to wait and for decreasing offers
Meanwhile, sellers are left waiting as well.
In October 2022, Kansas resident Desiree Edgington listed her mother's three-bedroom home for $650,000. Now, over a year later, she is finally under contract but at $400,000, well below her initial asking price. She's even agreed to a $7,000 credit to the buyers.
"We really expected it to sell right away," Edgington told the Journal. "We had to keep dropping our price."
Edgington isn't alone in her price-slashing.
In September, over 9% of home listings nationally experienced a price cut in just one week, according to real-estate site Zillow, which told Insider the phenomenon was "unusually high."
The firm also readjusted its prediction for home prices, forecasting a smaller 4.9% increase down from a previously reported 6.5% increase over the next year.
Have you bought or sold a home recently? Are you in the process of buying or selling one? What was the experience like? Insider wants to hear from you. Reach out to editor Zoe Rosenberg at zrosenberg@insider.com to share your story.