In this January 2023 video, seasoned Southern California broker and investor Joe Homs (40+ years experience) analyzes the current U.S. housing market. He explains that limited inventory—driven by homeowners locked into ultra‑low‑rate mortgages—keeps prices high despite a year‑over‑year slowdown. The Federal Reserve’s ongoing rate hikes, coupled with rising unemployment (e.g., large tech layoffs), are expected to push rates higher into Q2‑Q3, further pressuring prices. Homs argues the market will not repeat the 2008 foreclosure wave because today’s borrowers have far more equity and loan structures are different. He forecasts a 10‑15% price decline in California, with inventory remaining low. For investors, he recommends hoarding cash, securing traditional or hard‑money pre‑qualification, and educating on flip versus buy‑and‑hold models. He highlights seller‑financing and subject‑to deals as low‑down‑payment opportunities, especially with aging baby‑boomer sellers who may prefer monthly interest income. The video concludes with a balanced view: most experts expect modest price drops, higher borrowing costs, and reduced buyer demand, but not a catastrophic collapse. Homs invites viewers to watch a deeper‑dive video and contact him for assistance.
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The nation's overall housing supply remains limited as those who purchased homes in recent years at extremely low mortgage rates are staying put. This tight inventory has kept prices from seeing deeper decline, making homes still unaffordable for many, especially first-time homebuyers. Even though home prices remain high year over year, they're not as eye-popping as they were earlier this year. How far housing prices dip in 2023 will depend on how high the interest Hi, my name is Joe Homs, and I flipped hundreds of homes here in Southern California. I have over 40 years of experience. I've been a broker, mentor, and investor, and I want you to like, subscribe, and share this content with your friends. In 2023, You're gonna still see that the interest rates are going to go up. Where they're going to end up is anybody's guess. Here we are in January of 2023, and the Fed is still talking about raising interest rates, which is absolutely crazy. Last year they said they were going to raise it 3/4 of a percent, and obviously we surpassed that. A lot. And I think they're still going to continue to raise interest rates until we get to the point where you start seeing a lot of people losing their jobs. Recently announced Amazon is laying off 60,000 or so people. Other big companies the same, a lot of high-tech companies laying off people. Here we go. That's the start. And we're going to get into more unemployment. And that's what the Fed is looking for, to slow this economy down to the point where unfortunately it hurts the housing industry. But that's where they're headed. Here, here's where we go. I don't know where it's going to stop. I can't even venture a guess. I honestly, I don't think it's going to stop until maybe Q2. of this year if we're lucky. And, you know, getting into Q3, that's what I'm waiting for, is the Fed to say, okay, we've stopped raising interest rates. And then I'm going to have a little bit better gauge as to how bad this housing market drop will be. I don't see a foreclosure tsunami coming. And, and the reason I don't see something like that This is different than 2008. The loans that were done after that were pretty much 20% down on a loan, and so I think we're okay with that. The lenders still have not gotten crazy at this point because they will start getting crazy. Their, their business is to make loans to people, and if The interest rates are going up. They're going to have to, you know, figure out, okay, how can we make more loans out there? Is it lowering the FICO scores, the credibility standards for applying for a loan, for getting a loan? So there's things that can be done, but I don't see that foreclosure tsunami that some other people are predicting out there. I just, I just don't see that, especially, you know, if you bought your house. I'm here in California. Let's say you bought your house for $500,000, and then the last few years it's worth $800,000. And so now we're backing off of that $800,000, but still, I mean, that's a $300,000 equity gap there that even if we went back down to that, you know, the owner of the property would still be able to sell the house at a profit and have some equity at the end of the day. I don't see this market doing the 2008 downturn. Do you like these type of videos? Do me a favor and hit that like button. My prediction is that inventory will still remain low, and it obviously will remain low because interest rates are high. And those people who were fortunate enough to get 3% loans locked in for 30 years, I doubt it that they're going to be moving anytime soon. You know, there's always those times where you have a job change, you know, divorce situation, death in a family, things like that that change things in life. And yes, you may need to sell your, your property, but those, those things are pretty rare. And honestly, I don't think that a lot of that is going to happen. So that's why I'm saying inventory is probably going to stay low for now and in the near future, at least through this year. Prices will continue to drop. They'll continue to drop as long as the Fed is raising rates. Prices will continue to drop as long as the Fed continues to raise rates. It was worth repeating, okay, because the Fed rate and interest rates are so directly tied into the housing market. They affect it 100% of the time that I think that basically that's what's going to happen. Let's talk about some tips to prepare yourself. If you're an investor, I would say great time to start hoarding cash and be prepared. So as the market comes down, we're currently, I would say, down 10 to 15% here in California. In certain areas, maybe a little bit more in others, but for the most part, 10% to 15%. And we're going to see how far it's going to go down, but you need to prepare yourself. Number one, have some cash ready to go to deploy. Number two, if you don't have a lot of cash, then start getting qualified with a loan through a traditional lender so that you know what your buying power is at the end of the day. If you're a flipper, make sure that That hard money is there and ready to go. So qualify with them as well. That's a lot easier to do than a traditional lender, but you should also take that step, that process. 4, start educating yourself. You know, again, do you at one point, do you want to, you know, become a buy and hold investor here in California when the prices get down to that point where you can start seeing positive cash flow? Or do you want to start flipping when it gets down to the bottom again? Do you know how to flip? Have you ever flipped? Best, best right now while we're on our way down to start educating yourself. Talk about utilizing seller financing. This is a great opportunity. Again, there are people out there that have 3% loans and they need or want to sell their house. And it's a simple conversation to have. Maybe a little bit more difficult to actually explain it to them, but try to keep it as simple as possible. You have a property that's worth $700,000, there's a loan of $300,000, and the folks want to sell it, and that $300,000 loan is at 3%. So if you want to do seller financing on something like that, or subject-to financing, you're going to take the, the first trust deed subject to, you're going to ask seller if he's willing to carry back another $300,000 for you. You put the difference down in escrow and there you go. You have some seller financing, completely wrapped a deal with as little money down as possible. Again, depending on how much the seller wants. We are entering the, you know, we've been in it for a while, but we're really, really entering into baby boomer Aging out of work and baby boomers that have large houses that their families were raised in that maybe they don't need anymore. And so when you ask for seller financing, that may be a reason why they're willing to say yes, because they really don't need the money, but they would like the cash flow coming in every month in the form of a check, an interest payment check, basically. So it can become attractive to them and it helps you out. Help them out. Win-win situation. Let's move forward. What do you think is going to happen? Depending on who you ask, the forecast for 2023 is mixed. Most experts in the housing industry predict less buyer demand, lower prices, and higher borrowing rates. Rate increases along with the shortage of availability have pushed many purchasers to the sidelines. Home prices may fall slightly, But not as drastically as they did in 2008. Some believe that the housing market will continue to outperform compared to the pre-pandemic. If you want to see a more in-depth video on how to thrive in a down market, click on this video right here. Feel free to reach out to me anytime. I'm always here to help.
