- A real estate veteran sees the housing market cooling further after a years-long bull run.
- ReMax founder Dave Liniger said prices could drop by up to 10% in some areas.
- As prices fall, he added, there will also likely be a mass exodus of estate agents.
How low could US home prices go in 2023?
“We think there could be a 10% adjustment in many places,” Dave Liniger, founder and former head of national real estate brokerage firm ReMax, told Insider on Wednesday. “It’s going to be a slower year than last year.”
Some regions, especially those that have seen high demand and fierce competition during the pandemic, have already seen prices fall from their 2022 highs. For example, San Francisco, San Jose, Seattle and Phoenix have all seen the median home prices have fallen 10% or more since the housing market peaked last year.
But there might be more room for prices to come down in major metros across the country, Liniger said, especially in California’s more expensive cities.
Markets in Texas and Florida will remain competitive, Liniger added, as more residents move from the Midwest and Northeast to areas with more temperate weather and lower income and property taxes. students.
Liniger, who founded ReMax in 1973, which today has 140,000 real estate agents in 110 countries, has seen many economic peaks and troughs during his 50-year career in real estate.
He says things are different this time – but for the better.
“Going into this market – as well as this recession that we’re probably going to get into – we don’t have this huge bulge of foreclosures and we don’t have the huge amount of unqualified buyers,” he said. said, referring to the early 2000s housing bubble that led to a tidal wave of lender foreclosures and short sales after the market collapsed in 2008.
Real estate agents could flee the industry
However, the 2008 real estate crisis led to high attrition among real estate agents, and that exodus from the industry could be repeated this time around, Liniger said.
Liniger said there are “probably at least 150,000 to 200,000” agents who have already left the company in the past nine months. Although data from the National Association of Realtors (NAR) does not show a decline of this magnitude, monthly membership appears to be on a downward trend as some agents return to their old careers or take on additional jobs.
According to historical NAR agent data, the organization lost more than 350,000 members between the pre-recession peak of 2006, when there were 1.35 million active agents, and the trough of 2012, when that number dropped to just under a million. In 2022, the NAR reported having 1.58 million members.
While the prospect of easy commissions during the pandemic-era home-buying frenzy has led many to turn to real estate careers, the industry has a notoriously high turnover rate. It can take years for new agents to learn the trade of closing deals and developing the necessary customer relationships.
Liniger said prospective agents should have a large enough cash reserve to cover several months of living expenses while getting their real estate career off the ground.