Zillow Said What?

Cori Dunphy
Published on January 23, 2023

Zillow Said What?

ZILLOW SAID WHAT????????  I can’t believe what I am hearing.  I can’t believe what I read.  AND I CAN’T BELIEVE I’M DOING EITHER OF THOSE THINGS ON ZILLOW, I never even go to Zillow.  I can’t stand Zillow.

For those of you who know me, you already know that I’m a local realtor here in Monmouth County, and I truly love where I live, work and play.  

You probably also know, that as a real estate agent, I can NOT stand Zillow.  I’ve made videos about how much even saying that word makes my skin crawl! But EVERYONE and I mean EVERYONE is talking about what is going to happen in the Real Estate Market in 2023.  So I felt I had to do some research myself.  

So yes, as disgusted as I was with myself, I too wanted to hear what Zillow how to say.  There are so many buyers out there and there are many who are ready to sell and they simply want to know, what is going to happen.  

In my humble opinion, Zillow is wrong on what they say 99% of the time, but this time……..  HMMMM they may not be so wrong…..at least on some of their points. 

So let’s dive in and talk about Zillows Bold Predictions for the New Year. 

The Midwest

Map of the Midwest

So the first and biggest thing Zillow is saying….. 

The Midwest to feature front and center in 2023….. In fact, they continue to say

This is a big change from what we have seen in the past few years, especially in 2022.  According to Zillow: Florida markets dominated the annual appreciation leaderboard in 2022, with Tennessee, the Carolinas, and Texas metro areas peppering into the top spots among the 100 largest metros. 

Yes, Florida will stay a major hotspot in the country, but affordability is becoming a key factor and as well all know, “Florida prices are INSANE”.  

The Midwest, however.  Yes, prices have risen but never gone to the extremes that the rest of the country has gone to.   

This is something I can honestly say I believe is going to happen.  The price of homes in the south ESPECIALLY in FLORIDA, are out of control.  I mean from what I see they reached almost the same price as here along the Jersey Shore.  

Keep an eye on the midwest I think many are going to be flocking to that area.  (insert map of the midwest) Just be sure you really REALLY LIKE THE COLD.  I mean like REALLY REALLY like the cold.  The winters there are insane.  

So what else did Zillow say?  

Sharing Houses (what)

family members holding hands

The next thing Zillow talks about is Buying with friends and family will gain momentum.  WHAT???????  Now we all know that a hot topic of conversation at gatherings with family and friends was the cost of houses.  And yes some people casually talked and joked about sharing houses to ease costs…… guess what?  THEY WEREN’T JOKING.   How crazy is this, according to Zillow:   

Zillow survey fielded this spring found that among successful recent homebuyers, 18% had purchased along with a friend or relative who wasn’t their spouse or partner, and 19% of prospective homebuyers intended to buy with a friend or relative in the next 12 months.  For both groups, affordability, and qualifying for a mortgage were cited as the top reasons for buying together  – challenges that are now even more acute. Mortgage payments for a typical U.S. home rose from needing 27% of median household income in January to 30% in March to 37% in October – far beyond the 30% threshold where housing becomes a financial burden.

Think about it,  how many people do you see starting to buy homes with parents?  I know I am.  For the past few months, I have been showing clients along with other family members who are planning to buy a home together.   So this is definitely happening already!

Up Next

The affordability crisis will stabilize, if not improve

Cash infront of a lap top

Zillow states that Affordability will continue to be the driving force in the housing market in 2023.  I mean how can I not agree with that statement?  Do I think the affordability crisis may stabilize, Yes I do,  But they continue to go on and state:  that there is a decent chance that the affordability crisis will improve. They lost me on that one.   

  I hope I’m wrong but I don’t see any improvement coming in the near future.  Will the market stabilize, maybe but improve?  That seems like a strong word to be throwing around.  

Up Next

A surge in first-time landlords in 2023

Handing over a key

Hmmmmmm,   The record-low mortgage rates of 2020 and 2021 spurred lots of investment in a second house, especially from mom-and-pop investors getting their second property. As rent growth continues its aggressive pace, many of these second homes have an even better potential to yield regular rental income above mortgage payment fixed with record low rates. The potential for regular income, bearish expectations for stock markets in 2023, and the big pullback from home buyers due to higher mortgage rates may reinforce the incentive to hold onto those investment properties, especially in areas like the Midwest Sun Belt, where household formation and housing demand is stronger. Rents should rise faster than home values over the next year and many will choose to rent out their property. 

So this I totally agree with.  I wish I could say it was because I personally bought my own investment property but, no not quite there yet, but it’s on my list.  However, I do have many friends who bought investment properties and they are doing incredible with them.  They have fabulous incoming streaming in.  

And Finally the last prediction from Zillow for 2023 

 New construction strength will be in rentals

New Constuction House

Whoa, there is a lot here to digest. It’s a lot, so I’m going to take you to Zillow to see exactly what they said.   This is exactly what Zillow has stated.

Despite a clear effort to pull back on permits and starts in single-family construction, the sheer number of units currently under construction after the pandemic construction boom (up 42% from pre-pandemic in October) will mean continued rolling deliveries to the market even as demand pulls back. This expected temporary glut in new homes available is driving price reductions for new construction, and potentially in the existing home market too, which otherwise will continue to experience low inventory levels as existing homeowners hold onto their homes and their record low mortgage rates. 

To mitigate the bloat in builders’ portfolios of finished new homes, builders will encourage buyers with lower prices, but more impactfully to the affordability of that mortgage payment to offer to buy points and lower the mortgage rate of new construction buyers.  

Builders of multi-family units are, in contrast, much more bullish. The number of multi-family units to start construction each month has fairly steadily increased, reaching 8% up from pre-pandemic in October. Elevated multi-family permits also point to a strong vote of confidence in continued demand for rental units despite looming recession fears. This confidence will also encourage more construction of build-for-rent homes, as many would-be homeowners will need to continue renting into later life stages if now unable to qualify and move forward with a purchase of their own.

Honestly, I can’t comment on this for many reasons.  I’m not a HUGE believer in renting unless it’s a must.  I’m going to just leave this one alone.  I hope builders would build more single-family homes, at least here in New Jersey.  WE HAVE NO INVENTORY……..

So there are Zillows BOLD predictions for the year 2023.  Again, I’m no Zillow fan, but some of what they are saying makes sense.  However,  they need to strongly discuss the inventory shortage.  I mean I can’t speak for the entire country, but here in New Jersey and Monmouth County WE HAVE NO FREAKING INVENTORY………..

So I do agree with some of what Zillow said, but hmm I’m not 100% sure I’d believe 100% of this stuff.  What about you?  Do you have any thoughts or predictions?  If so share them with me, I’d love to hear what others are thinking.  For now, I guess we’ll all just have to sit back and wait……………..

What are your thoughts on Zillows Bold Predictions?  Let me know. Drop a comment below! I”m curious!

Thanks for joining me this week, I’m Cori Dunphy and I will catch you on the next one!

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