Who wants to buy a house in 2023?

The housing market will end 2022 quite sour. Awaiting home sales in November dropped to their second lowest level since the National Association of Realtors started tracking those statistics 20 years ago.

And while mortgage rates have fallen in recent weeks, they are up 7% last month and are still well above where they were last year. Add to that the expected rate hikes from the Federal Reserve and the uncertainty about a possible recession next year, and you have to wonder: who exactly is going to buy a house in 2023?

To be clear, the Fresno, California housing market is not dead. But how is the market now compared to last year, when the influx of Bay Area home workers was at full steam?

“I’d say like the tortoise and the hare,” says Sabrina Brown, a local real estate agent.

Brown said she still gets some calls from certain types of buyers, such as renters who are just tired of renting and newlyweds who want to get bigger. But she’s noticed a new type of salesperson: the formerly remote worker.

“We have people changing jobs,” she said. “They say, ‘No, go back to the office.’ So we have those people [who] sell too.”

Those employee-to-office retetherings are pretty rare. People just don’t move much these days.

That trend will continue well into 2023, said economist Lawrence Yun of the National Association of Realtors.

“Overall annual sales will be lower next year, I think about a 7% or 10% decline in total unit sales,” he said.

That assumes the Fed wins the inflation battle and doesn’t raise interest rates higher than expected. While Yun said he expects prices to remain flat nationally, some coastal markets, such as San Francisco, could fall as much as 15%.

“The extremely expensive markets are always more sensitive to changes in mortgage rates.”

Of course, all those predictions could change depending on whether the economy goes into recession and how high the unemployment rate rises.

Even if there is an economic downturn, “buyers and sellers are still much better off today than they were before the pandemic,” said Zillow economist Orphe Divounguy.

Buyers are more likely to be sitting on savings and sellers have built up some equity as house prices have risen. Divounguy said he’s pretty optimistic about a market recovery, assuming the Fed really gets inflation under control.