Are home prices finally falling?

It’s been quiet lately … too quiet.

By quiet, I mean no more headlines about 100 people crowding into an open house, or bidding wars causing homes to sell for twice their asking price. In the wake of an ultra-competitive housing market driven to dizzying extremes by the pandemic, do we dare ask the question of whether things are starting to slow down?

The signs are there. Sales are down. Inventory is up. Will prices fall next?

We spoke to some analysts, and the growing consensus appears to be yes. It’s hard to say how much and when, but a few experts are forecasting price declines as early as next year.

Rising mortgage rates have slowed the housing market across the nation and Southern California, writes Andrew Khouri. Sales are down, inventory is rising and many prospective buyers and sellers have a simple question: Will home prices fall?

According to some analysts, the prospect is growing more likely as the slowdown deepens, with some now adjusting their forecasts to call for price declines next year.

Such predictions mark a shift from earlier this year, when there was greater expert agreement that rising mortgage rates would simply slow price appreciation. That is: Prices would keep climbing but less than they had in the last two years.

“It’s noteworthy,” said Jordan Levine, chief economist at the California Assn. of Realtors. “Prices are going to go down.”

This article was originally posted by the Los Angeles Times.