What LiesAhead:Lessons FromPast Market Corrections

After a real estate boom,the prospect of a slowdown can feel daunting But lessons from past downturns show there are potential upsides to market stability after a period of unsustainable growth That is particularly true for buyers,who enter 2023 with increased bargaining power after cutthroat competition,bidding wars,and record prices

The move toward a slower sales pace and stabilizing prices heralds a shift that is part of the housing market?s natural cycle,says Corey Burr,senior vice president,TTRSotheby?s International Realty,which has offices in Washington,DC ,Maryland,and Virginia ?I?ve done this all day every day for 35 years,so I?ve seen upswings at the peak of what the market can be, particularly 2005 to 2007 and also at the very end of the 1980s And I?ve seen market lows,which lasted through the 1990s,and which went from 2008 to 2013,?he says ?I personally subscribe to a theory that real estate runs in 16-year cycles?

Sales of new-build homes fell and construction stalled in 2022,at the same time that sales of existing homes dropped and mortgage applications hit a 22-year low,according to the Mortgage Bankers Association and the National Association of Realtors.But housing vacancies remained at historic lows heading into 2023,according to census data Mortgage underwriting remains tight,negative equity is nearly nonexistent,and the majority of loans are fixed-rate products, all of which suggest a fundamentally healthy market