Median home prices spiked 10.2% in 2022, but KPMG economists say there could be a 20% drop in home prices in 2023

Per Business Insider

Home prices significantly increased in 2022, and KPMG economists say that home prices could drop by 20% this year. The National Association of Realtors revealed that median home sale prices in 2022 rose by 10.2%, per CNN.

In December 2022, sales dropped by 34% year-over-year, with NAR's chief economist Lawrence Yun sharing how the month was extremely difficult for buyers. He shared how he expects sales to increase due to the decline in mortgage rates, which peaked in 2022.

Yun: “December was another difficult month for buyers, who continue to face limited inventory and high mortgage rates,”

Yelena Maleyev, a KPMG economist, shared that home prices could decline this year by a whopping 20%. Maleyev forecasts that there could be large declines in Boise, Los Angeles, Phoenix, and San Francisco.

The KPMG economist shared that the change should be taken with a grain of salt and that cancellations are not included in the data. It was also noted that they pay attention to the new home build market on top of the existing housing market.

Maleyev: "While that has been showing some strength...take that with some caution because cancellations are not recorded in that data, and the data in the last few months has been getting revised down."

The San Francisco commercial real estate has seen vacancies at 27.2% after 12 quarters of continuous increase. The largest increase was seen in the fourth quarter of 2020 at a whopping 16.9%, which was an increase of 13.2% year-over-year.

Blackstone has blocked withdrawals from its $69 billion real estate income trust. BREIT said it could fulfill redemption requests of around $1.3 billion, representing 25% of its $5.3 billion total withdrawal requests.

KKR also decided to block REIT withdrawals and only allowed $79.3 million to be withdrawn, just 62% of investors' repurchase requests totaling $128 million.

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