WASHINGTON (December 13, 2022) – Lawrence Yun, NAR chief economist and senior vice president of research, forecasts that 4.78 million existing homes will be sold, prices will remain stable, and Atlanta will be the top real estate market to watch in 2023 and beyond. Yun unveiled the association’s forecast today during NAR’s fourth annual year-end Real Estate Forecast Summit.
Yun predicts home sales will decline by 6.8% compared to 2022 (5.13 million) and the median home price will reach $385,800 – an increase of just 0.3% from this year ($384,500).
“Half of the country may experience small price gains, while the other half may see slight price declines,” Yun said. “However, markets in California may be the exception, with San Francisco, for example, likely to register price drops of 10–15%.”
It’s tempting to believe that it just takes longer to sell now. It’s brought on by the common thought among most home sellers; “Heck, I’m in no rush, I don’t need to sell, and I’m not giving it away!”
This is especially true for the higher-end homes.
I’ll never forget the RSF agent a few years back who mentioned that her listing was having its 1-year anniversary, and she spoke about it with pride, like it was her child having their first birthday. But we’ve been hired to sell the home, not just stay busy with showing it forever.
There is a fact about real estate sales in every market, everywhere:
The home that is the best buy in the marketplace will be the next one to sell. The reason your home isn’t selling is because the other homes for sale are offering a better value.
In a market that is trending upward, you can put a higher price on it and some day the market will come up to meet it – eventually the future sellers will price their home higher than yours, and finally make your home the best buy in the marketplace.
But in a downward-trending market, the market can get away from you quickly.
The listing that is priced 10% too high today will look like it’s 15% or 20% too high in a month or two. It’s why the showings stop completely – buyers have forgotten all about you because the price looks worse every day that goes by. It puts the seller in a position to ‘chase’ the market down with price reductions.
We’ve had an upward-trending market for the last 12 years. Those who priced their home too high have gotten away with it, because the market eventually rose high enough to meet them, and their price. The worst part is that people now just think it’s a fact that if you wait long enough, a buyer will come around and pay your price.
It’s probably still true, but instead of taking months to sell, it could take years.
If you are willing to wait for years, don’t put your home on the market now – wait until it’s obvious that your desired price would make your home the best buy in the neighborhood.
It’s doubtful that many will take this advice, and it’s why it’ll be likely that there will be over-priced turkeys (OPTs) starting to pile up in May/June. The selling season could get hot for a couple of months, but then get submarined by the growing amount of unsolds that don’t adjust on price.
Unless rates slide into the 4s, and bless sellers and agents with more frenzy!
Home sellers and agents need to decide on a pricing philosophy.
Do you price it high, and hope for the best? Or do you price it attractively and sell it promptly?
During the frenzy, pricing high was recommended because you couldn’t go wrong – everything was selling, and the worst case was settling for list price. Most sold over. But it’s different now, and you don’t want to be sloppy about price.
If a house doesn’t sell in the first month on the market, the buyers think the price is wrong, and will lowball – and you can’t blame them (wouldn’t you do the same?). The longer on the market, the worse it gets.
Let’s discuss it openly, for everyone’s sake.
If the list price is within 5% of being right, the house will sell in the first 30 days on the market. There is 5% of slush in every market, and there aren’t enough other sales nearby to say otherwise.
Let’s work it backwards. If the house doesn’t sell in the first 30 days, we know the price is at least 5% wrong. Because buyers are going to be conservative, they will want an additional 5% discount to feel secure.
After 30 days on the market, expect a 10% discount.
Sellers can object and try to fight it, but it will take luck to beat the odds – because the quality buyers are paying attention now, and without rising prices forcing them to make hasty decisions, they would rather wait, than to jump – especially when no one else has bit in the first 30 days.
After 30 days on the market, expect a 10% discount.
If it were a widely-publicized fact that pricing attractively avoids future peril, and if we all agreed that the 30+ day penalty was identified as -10%, then sellers could properly calibrate their expectations.
After 30 days on the market, expect a 10% discount.
If you want proof, here is my last graph that charted the NSDCC November sales:
If everyone – buyers, sellers, and agents – knew a discount was necessary after 30 days, the market would behave in a much more orderly and predictable way!
There shouldn’t be much new action for the rest of the month – it would be crazy to put a new listing on the MLS in the next 2-3 weeks. It means the current inventory – the lowest it’s been since May – couldn’t be any more picked over by those who don’t trust the Fed and were hoping to get lucky with their lowball offer and lock their rate in 2022.
This is the time of year that the ivory-tower types are issuing their forecasts for next year (NAR has a wrap-up coming tomorrow). But I’ve never heard so many people saying they don’t know what to expect in 2023. But isn’t it predictable?
Neither buyers or sellers will want to be the first to explore the new year, and because we’ll be having the lowest inventory in history, we’ll get off to a sluggish start. If there was finally a surge of boomer liquidations, it would help, but don’t get your hopes up. I would expect the seniors to be the last people to hurry up and get their home on the market early.
I expect a slow start as sellers ignore the recent market conditions and want to test the new year with exuberant list prices. As a result, only about a third of the new listings will actually sell, setting up a potentially stagnant market by May/June as the OPTs start to stack up.
This will be the first selling season in three years that pricing will be crucial!
This is how close we are to a market resurgence. If sellers would pay down 4% to 6% of the loan amount to lower the buyer’s mortgage rate by another 1% to 1.5% and get it into the 4s, we’d be looking good for springtime.
From JB:
In early December, 75% of nationally surveyed home builders confirmed they are buying down buyers’ mortgage rates to make payments more affordable.
Our survey indicates 32% of builders are buying down the full 30-year term and another 30% of builders are temporarily reducing the rate for the first two years of the mortgage. The remaining 13% of builders identified other less common buydowns. Builders pay these costs up front, effectively reducing monthly payments by prepaying for some of the buyers’ interest on the loan. Few resale sellers are offering these savings to prospective buyers.
Two popular strategies involve builders lowering the mortgage rate for the buyer:
30-year rate buydown: Builders are contributing 5%–6% of the home purchase price up front to lower the 30-year mortgage rate by 1%–2% typically. For example, builders may reduce the rate from 6.5% to 5.0% using last week’s Freddie Mac mortgage rate.
2-1 temporary rate buydown: Builders are contributing 2% of the home purchase price up front, which lowers the first-year mortgage rate by 2%, and the second-year mortgage rate by 1%. Using last week’s 6.5% rate, a buyer’s rate would be 4.5% in year one, 5.5% in year two, and 6.5% thereafter. Borrowers still have to qualify at the 6.5% rate to benefit from a reduced payment in the first few years, giving them some breathing room to perhaps spend money on furniture or other needed items.
Because buyers have to qualify at the highest rate that will occur during the 30-year term, builders using the 2-1 temporary buydown tell us some buyers still cannot qualify. By shifting to a 30-year rate buydown, builders can lower the rate and monthly payment used to qualify struggling buyers.
Read the full article with more calculations here:
Ivy covers all the topics in this recent interview. The most interesting was her graph above that shows how much quicker sales have declined this year, compared to the last downturn.
She is expecting -12% in national pricing, and -20% in sales next year.
The different topics are identified in the red line at the bottom of the YouTube, and I started at Pricing:
Realtor.com is forecasting that the San Diego-Carlsbad metro area will have prices dropping 27% in 2023, but also conclude that fewer sales (-23.7%) will make our area more affordable. They combine the two and call it +3.6% combined growth.
They base their forecast on the lack of affordability, which ignores how many, if not most, buyers are using a hefty down payment to keep their monthly payments more reasonable.
If there was a severe price dump in 2023 like they are describing, the sellers wouldn’t go for it, and the inventory would dry up. Just about every potential seller has to be thinking that they have already given up a certain percentage of their equity in 2022 (off their inflated sense of value), and waiting it out sounds way better than coughing up another 20%.
But this is the type of garbage that could get into people’s head, and whether it’s realistic or not doesn’t matter as much as the perception. Thanks Realtor.com!
There are concerns that lower pricing will cause recent home buyers to be underwater – and potentially create another bubble to pop. A factor to consider when assessing the current market conditions is how quickly the affluent buyers have taken over the marketplace between La Jolla and Carlsbad:
NSDCC Annual Detached-Home Sales
Price Range
2017
2018
2019
2020
2021
2022
Under $1M
1,040
706
667
543
120
20
$1M-$2M
1,475
1,505
1,552
1,784
1,621
684
$2M-$3M
384
383
405
518
766
588
Over $3M
232
236
244
385
724
607
Totals
3,131
2,830
2,868
3,230
3,231
1,899
We’re not done with 2022 but there will only be another 80-100 sales to add to this year’s total.
Two thoughts:
The recent buyers had to qualify for financing (if any), and with virtually all of them paying over $1,000,000, they are probably flush and not many will get spooked into selling.
When only the rich can participate, we won’t be having as many sales – with hardly any opportunities for the regular folks who hope to buy under $1,000,000.
Yes, if pricing keep coming down, there will be more sales in the lower-priced categories. But how many more under $1,000,000 next year? Forty? 80? It’s very unlikely that we will get back to the 2021 number, let alone have hundreds of homes selling under $1,000,000.
Not only will the inventory be lower, but the closed sales will probably decline next year too.
Winehouse released her follow-up album, Back to Black, in 2006, which went on to become an international success and one of the best-selling albums in UK history. At the 2007 Brit Awards it was nominated for British Album of the Year, and she received the award for British Female Solo Artist. The song “Rehab” won her a second Ivor Novello Award. At the 50th Grammy Awards in 2008, she won five awards, tying the then record for the most wins by a female artist in a single night and becoming the first British woman to win five Grammys, including three of the General Field “Big Four” Grammy Awards: Best New Artist, Record of the Year and Song of the Year (for “Rehab”), as well as Best Pop Vocal Album.
Winehouse struggled with substance abuse and addiction. She died of alcohol poisoning on 23 July 2011, at the age of 27. After her death, Back to Black briefly became the UK’s best-selling album of the 21st century. VH1 ranked Winehouse 26th on their list of the 100 Greatest Women in Music.
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A+ thank you
Lisa Tuomi
June 11, 2025
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Many years ago, we purchased a home in Carlsbad, using a realtor that was recommended to us - Jim Klinge. Fast forward to 2025, we recently had the privilege of selling 2 homes in Carlsbad, CA and didn't hesitate to reach out to Jim and Donna Klinge of Klinge Realty Group to guide us through the sales. The transactions were very different, each with its own unique situation, opportunities and challenges. From start to finish, Donna and Jim helped navigate the pre-sale preparation, the listing, showing of the house, buyer negotiations, the final close and all of the paperwork and decisions in between. What stands out with both transactions is the professionalism of Jim and Donna (and their team), wonderful communication (timely, relevant, concise), their deep understanding of market dynamics (setting realistic expectations), their access to top-notch contractors, and last, their ability to guide us across the finish line successfully. We wouldn't hesitate to use Jim and Donna in the future and highly recommend them for anyone looking to buy or sell a property in North San Diego County.
Jerry Meyer
March 28, 2025
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We sold a home with Jim and Donna and from beginning to end they were consummate professionals. Their initial walk through the property resulted in a list of items to be repaired or updated. They supplied a list of vendors and job quotes to do the repairs and updates. We originally wanted to sell ‘as is’ and just get it over with. They gave us a selling price for ‘as is’ and options for doing a few updates/repairs to doing it all with the selling price for each option. We agreed to do all they suggested and we sold for the exact price they predicted. For every dollar spent we got back more than $2 back in the selling price. And they got that price in a rising interest rate environment! Donna and Jim are extremely detailed and guide you through ever aspect of the sale. There were no surprises thanks to their guidance. We couldn’t be more pleased with their representation.
Thank you Donna and Jim,
Jerry and Mary
Heather Quejada
March 27, 2025
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We have known Jim & Donna Klinge for over a dozen years, having met them in Carlsbad where our children went to the same school. As long time North County residents, it was a no- brainer for us to have the Klinges be our eyes and ears for San Diego real estate in general and North County in particular. As my military career caused our family to move all over the country and overseas to Asia, Europe and the Pacific, we trusted Jim and Donna to help keep our house in Carlsbad rented with reliable and respectful tenants for over 10 years.
Naturally, when the time came to sell our beloved Carlsbad home to pursue a rural lifestyle in retirement out of California, we could think of no better team to represent us than Jim and Donna. They immediately went to work to update our house built in 2004 to current-day standards and trends — in 2 short months they transformed it into a literal modern-day masterpiece. We trusted their judgement implicitly and followed 100% of their recommended changes. When our house finally came on the market, there was a blizzard of serious interest, we had multiple offers by the third day and it sold in just 5 days after a frenzied bidding war for 20% above our asking price! The investment we made in upgrades recommended by Jim and Donna yielded a 4-fold return, in the process setting a new high water mark for a house sold in our community.
In our view, there are no better real estate professionals in all of San Diego than Jim and Donna Klinge. Buying or selling, you must run and beg Jim and Donna Klinge to represent you! Our family will never forget Jim, Donna, and their whole team at Compass — we are forever grateful to them.
Lou F
March 27, 2025
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WeI had the pleasure of working with Klinge Realty Group to sell our home in Carmel Valley, and I cannot recommend them highly enough!
Jim and Donna demonstrated exceptional professionalism, offering expert guidance on market conditions and pricing strategy, which resulted in a quick and successful sale.
Communication was prompt and we were well-informed throughout the entire process.
For anyone looking for a dedicated and knowledgeable real estate team, look no further!
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William Sams
March 25, 2025
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Donna and Jim Klinge of Klinge Realty Group have our highest possible recommendation. From Donna and Jim’s first visit to our house through closing their advice and counsel was candid and honest in all dealings. They kept us fully informed throughout the process. The house sold less than three days after listing with a two-week closing. My wife and I have sold several houses during our lives. This was by far the best experience. Klinge Reality is a premium service realtor. You can’t make a better choice for someone to sell your home fast and for top dollar.
Emily Hernandez
December 29, 2024
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Donna and Jim provided exceptional support and professionalism throughout the entire process. We couldn't have been happier with their efforts. They made our house shine, and thanks to their expertise, it sold above the listing price in the very first weekend! Truly a fantastic experience from start to finish.
Jesus Adrian Sahagun
November 11, 2024
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This year has been difficult on our family, mainly due to having to sell our home. Thankfully we knew God had a plan for us and working with the Klinge team was a key part of it. It was an obvious decision to work with them again after such an amazing experience when purchasing the same home we needed to sell. The challenge was, how will we do this in so little time with so much going on? Jim and Donna held our hand every step of the way. Whenever an unexpected issue arose they found and provided a solution. Never once did we feel pressured to make a decision and the Klinges were always reassuring after providing the information that the decision was ours to make. Despite the curve balls, they never panicked and exemplified the “can do” attitude, making us feel optimistic and taken care of. Their expertise and professionalism was superb. But of all the reasons to work with the Klinges, the most impactful and valuable is their compassion and genuine care for their clients. We pray that we can one day purchase our forever home and you better believe that Jim and Donna will be representing us - as long as they will have us of course. Thank you again Klinge team! Your execution, experience, and care are unmatched.
SABIHA PASHA
July 23, 2024
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Jim and Donna were fantastic! Jim understanding my needs, recommending potential places, pointing out the pros and cons of each property was invaluable. Then when the offer was accepted Donna’s organized guidance through the inspections, paperwork etc made the whole process seem effortless.
So grateful that I had them on my side!
Anu Koberg
July 13, 2024
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We first found Jim through his blog at bubbleinfo.com, which really showcased his knowledge of SoCal real estate. Since then we've done three transactions with Jim and Donna, and they are an incredible full service agency, with Jim's deep market insight and Donna's deft contract and project management. We trust them implicitly in their analysis and strategy, which is based on years of experience. They're always available and on top of things, and we strongly recommend them to anyone.
