Zillow Insights: 5 Graphs That Reveal the US Housing Market in 2023

Zillow has just released new data that provides valuable insights into the changes taking place in the real estate industry

Are you curious about the current state of the US housing market?

Zillow has just released new data that provides valuable insights into the changes taking place in the real estate industry. But that's not all - we've got something even more exciting for you!

Our team has analyzed the data and created five graphs that go beyond Zillow's report, providing an unparalleled view of the current housing market conditions. And one of these graphs offers a unique perspective on housing market pricing that you've never seen before.

Don't miss out on this chance to stay ahead of the game and understand what's happening in the real estate world!

Are Home Prices Heating Up?

As of late, prices in the housing market are showing signs of a rebound, indicating that demand is returning. 

Zillow reports the change in home prices each month across major US metropolitan areas

This uptick is likely due to dips in mortgage rates and alternative financing strategies becoming available. Existing home sales are negatively impacted as inventory levels are much lower than pre-pandemic levels. The low inventory levels are mainly due to existing homeowners being "trapped" in their homes with low mortgage rates, making it challenging for them to move to homes with higher mortgage rates coupled with higher home prices.

The low inventory is expected to continue influencing prices in the housing market, making it challenging for buyers to transact in the foreseeable future. Even as we move further away from the era of 3% rates, existing homeowners will eventually become less attached to their ultra-low monthly payments, and new listings will gradually fill the market again.

Unfortunately, new home construction is decreasing, so overall inventory will remain limited. As a result, prospective buyers waiting for prices to become more affordable will be sorely disappointed in the future.

A better plan for people desiring a new home includes exploring alternative financing options, such as down payment assistance or buying their rate down. Unfortunately, buyers in today's low-inventory market will have difficulty encouraging sellers to help, as sellers often deal with more than one offer on their homes.

Keep Up With New Trends In Tallahassee!

Get The Tallahassee Real Estate Newsletter

Subscribe to the Tallahassee Real Estate Newsletter for updates on home sales in Tallahassee, FloridaDon't be the one that doesn't know what's going on when you sell a home or buy a home in Tallahassee.

Other buyers, sellers, lenders, and real estate agents have this critical information, and now you can too!

Get immediate access to our most recent newsletter.

Let more than 30 years of experience work for you with charts, graphs, and analysis of the Tallahassee housing market.

All Price Points Move Higher (AGAIN)

As the spring home shopping season continues, entry-level shoppers should anticipate a more challenging market.

Entry-level shoppers heading into spring can expect a tighter market

This spring shopping season, entry-level homebuyers should brace for a tighter market than those shopping for middle and upper-priced homes. In March, the bottom third of the home price distribution saw a 9.5% annual appreciation. Since last year, home values for entry-level homes have experienced the most annual appreciation in most markets.

Before the pandemic, it was typical for low-tier homes to be comparably down faster than middle and top-price-tier homes, but the pandemic accelerated that growth. This means buyers who were not ready or able to take advantage of historically low-interest rates two years ago will find themselves in a significantly more expensive market with less purchasing power. For some buyers, this means they cannot enter the market at all. For others, it means setting their sights on homes they might never have considered owning.

Top-priced homes rose by just 1.3% over the past year and appear poised to hit an annual decline. Before the housing bubble, home builders could produce new homes in all three tiers (or at least the top two tiers in most markets). But with increases in the minimum wage and inflation, builders can no longer deliver homes in the bottom tier of home prices so we must anticipate further growth in the neediest segment of the housing market.

Home Price Growth Not Equally Distributed

When we segment the market into three home price tiers, the home affordability crisis gains some clarity.

This graph segments the market in thirds to show how home prices are changing

Nationally, prices for entry-level homes have increased by 9.5% year-over-year, with Tampa, Richmond, and Charlotte seeing over 60% appreciation from pre-pandemic levels. In Tampa, I know of two recent law school graduates who are getting married and looking for a home, and they cannot find anything within their budget. If two young attorneys combining their salaries cannot afford a home, what does that tell you about housing affordability?

On the other hand, top-tier priced homes only increased by 1.3% over the past twelve months. High mortgage interest rates are equally affecting the supply of homes across all price tiers. New listings for bottom, middle, and top-tier homes are comparably down. However, middle and top-tier shoppers are experiencing fewer bidding wars compared to pre-pandemic years.

Are you a NIMBY or a YIMBY?
Two terms have gained prominence over the past few years. NIMBY (Not In My Back Yard) and YIMBY (Yes, In My Back Yard) are labels that classify housing market activists into one of two camps
Home Affordability Falls To 40-Year Low!
It's been over forty years since homes were more expensive than today when you factor in inflation, home prices, and mortgage interest rates.
The Surprising Way Interest Rates Move The Market
When mortgage interest rates change, housing market experts surface and make bold claims on how the market will unfold. They are usually wrong!
Real Story Behind Home Prices: Fact Versus Fiction
When it comes to buying a home, many misconceptions about the housing market can cause confusion and uncertainty for potential homebuyers. One of the most persistent myths is that home prices fall frequently, but is this true?
Biden Rent Control Plan
The White House announced an executive action that Biden says is designed to "protect renters and promote rental affordability," but I cannot imagine a worse response from our Commander In Chief to confront the nation's housing and rental affordability crisis
Will Assumable Mortgages Save Housing?
Will assumable mortgages save housing? Home affordability is becoming one of the hottest topics in the economy, but I was recently asked if assumable mortgages might bring some relief to homebuyers. This video shares what I think about how mortgage assumption will impact housing.
Renter Nation Says Goodbye To The American Dream!
It's the beginning of a generational shift in the housing market that will greatly reduce homeownership and push the US towards becoming a renter nation, one in which Wall Street is in control of both home prices and rents
The Truth About Foreclosures - Mortgage Pipeline Update
The best way to start to analyze the potential for mass foreclosures is to break down the current mortgage pipeline to observe forming trends.
Home Prices Are Doing What?
The hype-headlines are scary, exclaiming falling home prices and the coming housing market crash. Here's what the housing market facts reveal:
Will NINJA Loans Bring Down The Housing Market?
Housing Crash Coming? If you remember back to the housing bubble, we saw the growth of "NINJA" loans, as they were a segment of the home sales explosion.
Google Knows. The Surprising Real Estate Market Forecast You Won't Believe!
Is it possible to forecast home sales in the US housing market with a search on Google? I had this thought about Google and a google housing market forecast as I was reexamining our search engine optimization efforts.
Economic Outlook For The Housing Market
Joe Manausa gives an update on the economic outlook for Tallahassee and the US housing market. Includes housing market forecast, housing market activity, and new construction analysis, and reveals how Tallahassee compares with the overall US housing market.
Will New Construction Bottleneck Cause A New Housing Bubble?
Are you concerned that the bottleneck of builder homes under construction will cause a new housing bubble as they are finally completed?
6 Housing Market Rumors Debunked (1 Confirmed)
7 different housing market rumors are perpetuated as “FACT” in various forms of "hype." Discussion of this "housing market news" has been ongoing for years, so today, I want to put them all to rest.
Who To Blame For Soaring Home Prices
There is a huge shortage of homes in the US, and there is only one culprit to blame, and I’m going to tell you who it is!
What You Don't Know About Home Prices!
Home prices are gaining traction as topics in both the mainstream media and social media, but there are three common misconceptions about the change in house prices that are unanimously reported as unquestionably true.
Is The Supply Of Homes For Sale Finally Rising?
Is The Supply Of Homes For Sale Finally Rising? Is the US housing market heading for a crash? Will home prices fall? Follow the metrics that clearly show what to expect from home prices and the supply of homes for sale in 2022 and beyond.
Zillow Exposes Mainstream Media On Home Prices
Zillow serves up the data that exposes the poor reporting of the mainstream media on Zillow home prices and that conditions are not what they seem.
House Prices - Inflation Adjusted Home Prices
Just How High Are Today's House Prices? The price of houses in the US has risen to a toxic level, and many are wondering how they will be able to afford to live in their local communities
Podcast: Housing Myths Dispelled
Home Building Hero David Belman and Joe Manausa discuss many of the "myths" that have been published in the media about the housing market.
USA Today Misleads Readers About Home Prices
USA Today Misleads Readers About Home Prices - Median Home Price: The USA Today Network has been misleading readers, using the median home price change suggesting that houses are getting cheaper and a real estate crash is upon us. Is this poor journalism or is there something more to it?
Home Affordability Crisis - Major Housing Market Shift
Home affordability is plummeting, and this home affordability forecast explains why real estate prices are becoming less affordable with each passing month.
Are We Overbuilding Again?
I've been asked recently for my opinion on the number of homes being built in the US. Specifically, people are wondering if the ghost of 2006 has come back to bring more homes to the market than what can be consumed?
Housing - Do You Follow Your Gut (Or Analytics) In Housing?
I think the signs in the housing market are loud and clear, yet most real estate reports I read or view are missing the most critical factor in housing today.
Home Ownership Is Radically Different For Millennials
This is a simple millennial housing case study that will clearly show that the millennials will face a housing market like no other generation going back to post-World War II.
When Will Home Prices Fall?
Are Home Values About To Crash AGAIN? Now that we've seen about three years' worth of skyrocketing home prices, prudent buyers with memories are asking when home prices are going to start falling again.
How Often Do Home Prices Fall?
Are home prices falling? Will house prices fall soon? Home prices are soaring, buyers are having to pay above most sellers' asking prices, and the housing market feels just like a feeding frenzy during Shark Week on the Discovery Channel.
What Do Low Mortgage Interest Rates Really Mean?
Every article or video about mortgage interest rates conveys that rates are low, but do you really know what it means?

Spring Brings Momentum to Housing Market

Though home sales are down more than 30% compared to last year, it is the time of year when we expect the highest demand from buyers.

Graph shows how active each month is for homebuyers

This graph shows the percentage of annual contracts by month, measuring the decision dates of buyers rather than closing dates.

The housing market experiences more activity at certain times of the year, which is referred to as "seasonality." We are currently in the most active time of the year, which typically spans from March through July. This five-month period typically sees about the same number of contracts as the seven months of August through February.

The traditional seasonal patterns in the housing market were disrupted in the previous three years due to COVID, plunging mortgage interest rates at the end of 2020 and throughout 2021, and rising interest rates in 2022 after the first quarter. It's as though there was a conspiracy working against seasonality in the housing market. Despite this, we expect to see the usual seasonal uptick in buyer activity through July in 2023.

What Is Holding Back Home Sales?

I anticipate that there will be robust buyer activity in May 2023, but I expect the number of homes sold to be considerably less than last year. The current supply of available homes for sale is inadequate to support a significant recovery, so we are relying on homebuilders to increase inventory and bolster the market.

Unfortunately, homebuilders face the challenge of delivering homes that the market can afford. Unlike low-inventory periods in the past, the current era faces an epic disparity between the cost of new and used homes, with new homes averaging nearly double the price of existing homes.

The cost of new home construction is through the roof

By way of example, in Tallahassee, our median existing-home price is $255,000, while our median new home price is 93% higher at $492,000. Simply put, we need a bunch more $255K homes, but the median builder home is priced at $492K.

Understanding The Home Affordability Housing Crisis

Though the graph above was created from the Tallahassee real estate market data, it parallels what you will find in most other local US housing markets. The numbers might be a little different, but the relative difference between new and used home costs is very real.

The picture this graph paints is very clear. The average cost difference between new and used homes (measured in price per square foot, shown in blue) was typically below 10% for the thirty (30) years ending in 2011. Today, the difference is three times greater.

Higher housing prices resulted from communities making it harder to develop land for housing. To bring infrastructure up to date, communities required developers to pay for past shortcomings from previous developers, which means that current developers had to factor in additional costs to their budget. These costs extended beyond just the increased demand that new homes would place on the system.

We've also seen the largest growth in the minimum wage over the past five years (Florida saw the minimum wage grow by more than 75% in a five-year span). On top of that, the NIMBY movement challenged most new developments in the works, adding even more costs due to cancellations, disapproval, or reductions in unit density. Most US metropolitan areas have made housing unaffordable with 30 years of poor policy and poor decision-making.

The shortage of housing supply is a persistent problem that cannot be ignored. If left unaddressed, it will intensify inequality between those with access to affordable housing and those without access. Addressing this issue requires active and concerted efforts at the local level. If you want to be a part of the solution for affordable housing, it starts in your own backyard. Get active in your community and let your elected officials know that you care and you are paying attention to what they are doing.

Zillow Drops Bombshell Real Estate Update
You won't want to miss the latest data release from Zillow. They've just dropped a bombshell of a report that will significantly impact the housing market.
How Bad Is It? SHOCKING Building Permits Report!
The lack of home affordability has become a widely discussed issue in the media - the shortfall in new single-family home permits and multi-family property permits and construction exacerbates the current housing crisis.
Will New Construction Bottleneck Cause A New Housing Bubble?
Are you concerned that the bottleneck of builder homes under construction will cause a new housing bubble as they are finally completed?
Google Knows. The Surprising Real Estate Market Forecast You Won't Believe!
Is it possible to forecast home sales in the US housing market with a search on Google? I had this thought about Google and a google housing market forecast as I was reexamining our search engine optimization efforts.
The Truth About Foreclosures - Mortgage Pipeline Update
The best way to start to analyze the potential for mass foreclosures is to break down the current mortgage pipeline to observe forming trends.
Renter Nation Says Goodbye To The American Dream!
It's the beginning of a generational shift in the housing market that will greatly reduce homeownership and push the US towards becoming a renter nation, one in which Wall Street is in control of both home prices and rents
The Surprising Way Interest Rates Move The Market
When mortgage interest rates change, housing market experts surface and make bold claims on how the market will unfold. They are usually wrong!
Home Affordability Falls To 40-Year Low!
It's been over forty years since homes were more expensive than today when you factor in inflation, home prices, and mortgage interest rates.
Biden Rent Control Plan
The White House announced an executive action that Biden says is designed to "protect renters and promote rental affordability," but I cannot imagine a worse response from our Commander In Chief to confront the nation's housing and rental affordability crisis
Market Equilibrium, How The Balance Has Changed In Real Estate
The way we estimate housing market equilibrium has changed, and with it, the way the market is evaluated must change.
What You Don't Know About Home Prices!
Home prices are gaining traction as topics in both the mainstream media and social media, but there are three common misconceptions about the change in house prices that are unanimously reported as unquestionably true.
New Home Construction Report
Kevin Erdmann Housing Update September 2022 - Explains the new home construction pipeline and what to know about the number of homes being built in the US.
Home Prices Are Doing What?
The hype-headlines are scary, exclaiming falling home prices and the coming housing market crash. Here's what the housing market facts reveal:
REDFIN Reports Falling Home Prices?
Does the latest Redfin real estate report show home prices falling? I reviewed the Redfin real estate data, but did I find home prices dropping?
Unlocking Zillow's Latest Housing Trends And Forecasts
Zillow has shared its extensive data that we have used to generate our monthly housing market update. Zillow reports this right now:
House Prices - Inflation Adjusted Home Prices
Just How High Are Today's House Prices? The price of houses in the US has risen to a toxic level, and many are wondering how they will be able to afford to live in their local communities
USA Today Misleads Readers About Home Prices
USA Today Misleads Readers About Home Prices - Median Home Price: The USA Today Network has been misleading readers, using the median home price change suggesting that houses are getting cheaper and a real estate crash is upon us. Is this poor journalism or is there something more to it?
Economic Outlook For The Housing Market
Joe Manausa gives an update on the economic outlook for Tallahassee and the US housing market. Includes housing market forecast, housing market activity, and new construction analysis, and reveals how Tallahassee compares with the overall US housing market.
Podcast: Housing Myths Dispelled
Home Building Hero David Belman and Joe Manausa discuss many of the "myths" that have been published in the media about the housing market.
Are Wages Keeping Up With Rising Home Prices
Home prices are rising. Mortgage interest rates are rising. Are people earning enough money to buy homes today, or is the home affordability crisis getting worse?
Zillow - Surprising Home Sales Report
Zillow has something to say about the housing market. Zillow's data suggests something else is happening. And it’s not just Zillow.
Zillow Exposes Mainstream Media On Home Prices
Zillow serves up the data that exposes the poor reporting of the mainstream media on Zillow home prices and that conditions are not what they seem.
Housing - Do You Follow Your Gut (Or Analytics) In Housing?
I think the signs in the housing market are loud and clear, yet most real estate reports I read or view are missing the most critical factor in housing today.
6 Housing Market Rumors Debunked (1 Confirmed)
7 different housing market rumors are perpetuated as “FACT” in various forms of "hype." Discussion of this "housing market news" has been ongoing for years, so today, I want to put them all to rest.
Is The Supply Of Homes For Sale Finally Rising?
Is The Supply Of Homes For Sale Finally Rising? Is the US housing market heading for a crash? Will home prices fall? Follow the metrics that clearly show what to expect from home prices and the supply of homes for sale in 2022 and beyond.
Who To Blame For Soaring Home Prices
There is a huge shortage of homes in the US, and there is only one culprit to blame, and I’m going to tell you who it is!
When Will Home Prices Fall?
Are Home Values About To Crash AGAIN? Now that we've seen about three years' worth of skyrocketing home prices, prudent buyers with memories are asking when home prices are going to start falling again.
Home Ownership Is Radically Different For Millennials
This is a simple millennial housing case study that will clearly show that the millennials will face a housing market like no other generation going back to post-World War II.
Are We Overbuilding Again?
I've been asked recently for my opinion on the number of homes being built in the US. Specifically, people are wondering if the ghost of 2006 has come back to bring more homes to the market than what can be consumed?
Home Affordability Crisis - Major Housing Market Shift
Home affordability is plummeting, and this home affordability forecast explains why real estate prices are becoming less affordable with each passing month.
Why It's Alway About Supply And Demand In Real Estate
It's all about supply and demand. The real estate supply and demand dynamic tells us everything we need to know to forecast home sales in any given area.
Building Permits Reveal Major Housing Crisis
How do we know there is a major housing crisis brewing? Look no further than building permits! This video examines building permits in detail, as the issue of home affordability is going to become one of the most prominent topics for many years in the national media.
Interesting Employment Dynamic Impacts Home Sales
Home sales in the United States are vibrant, and we can look to the economy as a big reason homes are selling. I have found a pocket of data on the Federal Reserve Economic Data website that explains the vitality of the US housing market.
How Often Do Home Prices Fall?
Are home prices falling? Will house prices fall soon? Home prices are soaring, buyers are having to pay above most sellers' asking prices, and the housing market feels just like a feeding frenzy during Shark Week on the Discovery Channel.
What Do Low Mortgage Interest Rates Really Mean?
Every article or video about mortgage interest rates conveys that rates are low, but do you really know what it means?
Homeownership Rate Crash #shorts
60 Second Video: Homeownership is going to decline over the next 30 years, as home affordability hits the worst levels seen since the end of World War II. This is a generational shift in the housing market

There are a lot of people who endorse Joe for the job of selling your home, from Barbara Corcoran (Star of ABC's Shark Tank) to Preston Scott (host of Tallahassee's top daily "Audio Magazine," as well as the thousands of happy customers Joe has helped in the past. Listen why!

Post a Comment

(850) 378-5727