Macro Trends Advisors founding partner Mitch Roschelle says it’s a “buyers’ market” as the US sees a major correction in house prices.
the The US real estate market is experiencing its second largest post-World War II house price correction.
Macro Trends Advisors founding partner Mitch Roschelle attributed the massive correction to Americans’ uncertainty for the markets and their “malaise” vis-à-vis the economy. He explained on “Varney & Co.Friday that the “shoe to drop” would be if the country starts to see a rise in unemployment, which could cause a “pause down” in the housing market.
Mphasis Digital Risk Founder and Managing Director, Jeff Taylor, shares advice on buying homes and gives his outlook on the housing market in 2023 in “Mornings with Maria”.
“A couple of things are going to spin it in the opposite direction, which means house prices go up. One is certainty. And when you don’t know whether interest rates are going to go up or not. I think that’s what’s stopping a lot of people from buying because they just don’t know if the rates will be cheaper in two months, and they’ll just wait,” Roschelle told FOX Business’ Ashley Webster.
GOV. RON DESANTIS TAKES STEPS TO ‘HELP THE AVERAGE PERSON’ BUY A HOME: REAL ESTATE EXPERT
“And the other thing is the unease about the economy. And I think the shoe to drop there would be if we start to see layoffs, and we start to see unemployment start to rise, I think that could be something that causes a leg up in the housing market in a big way.”
A ‘For Sale’ sign sits in front of a home on the market as the country experiences its second biggest house price correction after World War II. (iStock/iStock)
Roschelle’s comments follow the massive power shift taking place in the real estate market. Arguing that the power has “completely swung[ed]away from sellers, further “constraining” the country’s struggling housing supply.
“Right now, I would say it’s a buyer’s market. I think the power has completely shifted from the seller to the buyer. That’s not to say there aren’t bidding wars, because again, I think statistically nationwide, we’re at 3.3 months supply. So it’s still relatively low,” Roschelle said.
“So if there’s a house that comes on the market that’s perfect, and it ticks all the boxes for buyers and there are buyers in the market, I think you might see wars sporadic bidding, but mostly, you know, it’s one or two of the people running after that house. And we don’t see it. We don’t see it.”
Nest Seekers International chief economist Erin Sykes provides insight into the 2023 real estate market in “The Claman Countdown”.
In addition to the supply and demand problem in the real estate markets, the average house price is expected to fall from its pandemic-induced peak.
According to Fortune.com, real estate prices in the United States in October 2022 are 38.1% higher than March 2020 levels. Roschelle projects that the average house price will have to fall 10-15% from its 2022 peak.
EXISTING HOME SALES DROP 7.7% IN NOVEMBER, 10TH CONSECUTIVE MONTH OF DROP
“My 10% to 15% [prediction] is from the peak of 2022, where we land in terms of average house prices down 10-15%. Which, if we’re talking about the stock market, would definitely be considered a correction, but not a bear market. The thing to remember is that from February 2020, house prices have increased by 40% until we are today,” explained the housing expert.
FILE – In this April 1, 2020, photo, a “For Sale” sign stands in front of a home being sold in Monroe, Wash., outside of Seattle. (AP Photo/Elaine Thompson, File) (AP Photo/Elaine Thompson, File/AP Newsroom)
GET FOX BUSINESS ON THE ROAD BY CLICKING HERE
“So what we’re doing is we’re giving back maybe a third or a quarter of the gains that we’ve made at most. But that doesn’t help someone who’s just bought a house at the top market and now has something that’s down 10%,” Roschelle concluded.