U.S. Housing Market Plays Monopoly; Passes Go and Collects a Record-breaking $47.5 Trillion in 2023, Says Redfin
The Skinny Drops Like an Overpriced McMansion
- The U.S. housing market is on fire; not literally, thankfully, but skyrocketing values have led to a record-breaking $47.5 trillion valuation in 2023 – because why not?
- This might seem contradictory as the sales have actually slowed down, just like that guy who keeps making the cash register ‘cha-ching’ sound at your local store. However, the total value of 90 million U.S. homes rose from $45.1 trillion in December 2022 to $47.5 trillion in December 2023. That’s a whopping 5.3 percent annual difference that makes your savings account weep.
- According to Redfin, the online real estate brokerage, this spectacular surge is driven by escalating home prices like those frighteningly steep roller-coasters (hold on tight).
- The luxury market saw increased buyer competition, often leading to cash offers and bidding wars reminiscent of a wild west cowboy shootout.
- However, the affordable housing segment had less luck and got to play Cinderella – covered in dust and overlooked.
- In the midst of all this chaos, the number of homes for sale dropped 18 percent in December 2023, the largest year-over-year drop, making house hunting as challenging as finding a needle in a haystack. Or a cupcake in a gym.
Who’ll Be The Big Winners?
- Homeowners sitting pretty on their (literal) piles of assets are the clear winners, especially those in popular metros and coastal markets. It’s like finding a golden ticket in every chocolate you eat!
- The soaring house prices may not be good news for first-time buyers and low-income households. A potential homebuyer saying “I am priced out” will be as common as a teenager declaring, “I can’t live without Wi-Fi.”
- But don’t forget about real estate investors lurking behind the scenes. With prices on the up and up, they’re greedily rubbing their hands together like a bunch of comic book villains.
Hot Take Alert: Beware The Soaring Real Estate Bubble
- The housing market’s breakneck value increase may have economists and bubble-watchers nervously twitching their curtains. Is this healthy growth or the first signs of a frothy market destined to burst?
- But in the world of economics, what goes up must eventually stabilize, deflate, or (gasp) crash. The crux is to predict the landing.
I miss when news from the U.S. housing market was as dry as a moisture-deprived raisin. But nooo, now it’s blossomed into a drama-filled soap opera complete with reckless spending, heightened emotions, and cliffhangers about possible market crashes. In this plot, homeowners are the giddy socialites bathed in newfound wealth, while first-time buyers are the heartbroken protagonists, trapped and angst-ridden. The housing market may have rolled a six on the Monopoly board, but let’s hope it doesn’t land on an unfortunate “Go to Jail.” Fingers crossed we see more ‘Community Chest’ and less ‘Chance’ in the upcoming episodes of this Billion-Dollar Bazaar.
Original article: https://www.inman.com/2024/02/28/us-housing-market-posted-record-setting-value-growth-in-2023/
