Fannie Mae Continues to Forecast 2023 Recession
According to new research from Fannie Mae’s Economic and Strategic Research Group (ESR), the housing market is expected to further cool as mortgage rates continue to rise and continues to predict an official recession conditions in 2023.
According to the ESR, economic growth is projected to resume in the second half of 2022, but the combination of inflation, monetary policy tightening, and a slowing housing market is “likely to tip” the economy into a “modest recession” sometime after the new year.
The ESR held steady in their forecast of 0.0% real GDP growth on a full-year basis through 2022, but revised downward its projections for full-year growth by 0.1% to –0.5%.
As core inflation remains higher than the Federal Reserve’s Federal Open Market Committee target of 2%, the ESR continues to believe that further interest rate increases are probable. The group predicts a rate of 3.50% to 3.75% by early 2023, though there is significant uncertainty in what the eventual rate may turn out to be.
Due to the fact that mortgage rates are surpassing 6.5%, the ESR also lowered its forecast for single-family total home sales in 2022 to 5.71 million units and 4.98 million units in 2023, which represent declines of 17.2% and 12.8%, respectively. While multifamily construction remains strong, the ESR Group also revised downward its multifamily starts forecast for 2022 to 542,000 units but continues to expect demand for rental units to remain strong because of the single-family market’s relative unaffordability.
“In our view, the recent interest rate surge is due to the market’s recognition of two critical factors: that inflation is indeed not transitory, and that, to tame it, the Federal Reserve will need to be resolute, even at the risk of possible recession,”....READ MORE
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The Current Miami Springs Market
A GREAT TIME TO SELL!
There are twenty-nine (29) active listings in the MS/VG market this week. The inventory has been increasing the last several weeks. It had averaged approximately 15-20 listings the last several months. I expect continued increases in inventory in the months ahead. Pending sales have slowed. There are only three (3) pending sales. A definite sign that sales have slowed down. Values are still strong in Miami Springs and Virginia Gardens. Despite interest rate increases, there are still many qualified Buyers out there, BUT as rates increase, there WILL be fewer Buyers! Today, it is still a Sellers' market. Please refer to the articles posted on our website.
Twenty-seven (27) of the active listings are priced over $500,000. Six (6) properties are listed between 1-2 million dollars. One (1) is listed for OVER 2 million dollars! Ten (10) of the active listings have had a price reduction; one (1) this week. We remain in a Sellers' market due to high demand but that has started to change. More interest rate increases are coming in 2022. We anticipate inventory will increase.
MULTIPLE OFFERS HAVE DROPPED AND DEMAND IS SLOWING!
Mortgage interest rates topped 6% last week, with more increased expected. There are still serious qualified Buyers looking for the right property. Timing is everything! Multiple offers are less common and properties are staying on the market for longer. The demand remains high for properties under $500,000. There are two (2) listings just under $500,000. The low inventory and interest hikes make it difficult for most first-time Buyers. Two (2) properties are priced between $400,000-$500,000. Two (2) properties are priced between $500,000-$600,000; seven (7) between $600,000-$700,000; four (4) between $700,000-$800,000; four (4) between $800,000-$900,000; three (3) between $900,000-$1,000,000; six (6) between $1-2 million; and one (1) is listed for over $2 million.
SELLERS, THIS IS YOUR MOMENT!
Low Inventory + Low Interest Rates = Seller's Market.
During the period of September 23, 2022 through September 30, 2022, there were reported 2 new listings, 1 closed sale, 1 pending sale, 1 active with contract, 0 expired listings, 0 cancelled listings, 0 temp off market, 1 price reduction, and 0 price increases.
HOW DOES YOUR HOUSE COMPARE?
The table below shows the current status of the Miami Springs/VG real estate market as of Friday, September 30, 2022. All closed sales are within the last 90 days.
*Disclaimer: The data relating to real estate displayed on this website and the chart above comes from the Miami Board of Realtors MLS. All listing information is deemed reliable but not guaranteed and can be independently verified.
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